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Explanatory Material: Part 4—Issues noted for possible future reform

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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 »


This Part notes matters that may require reform or amendment, but that fall outside the scope of the revision powers. Our list is not exhaustive and we do invite comment on other issues that may need reform.

Old provision numberNew provisionIssue for future reform
General
n/a Act binds  the Crown See discussion in Part 2 of this document.
Section
44 80 Rights where partnership dissolved for fraud or misrepresentation Section 44 of the 1908 Act does not seem to align well with the Contractual Remedies Act 1979 (now in subpart 3 of Part 2 of the Contract and Commercial Law Act 2017 (the 2017 Act)). The relationship between the contractual remedies provisions and section 44 of the 1908 Act is puzzling. The contractual remedies subpart appears to apply to an agreement to become a partner unless the subpart has been validly contracted out of.  Section 59(1)(h) of the 2017 Act states that nothing in that subpart affects “any other enactment to the extent that it prescribes or governs terms of contracts or remedies available in respect of contracts, or governs the enforcement of contracts”. By referring to rescinding for fraud or misrepresentation, section 44 of the 1908 Act is out of sync with the concept of “cancellation” in the 1979 Act (and the 2017 Act).  The 1979 Act did not consequentially amend the 1908 Act to update “rescind” to “cancel”. It can be argued that by not making the consequential amendment in 1979, the equity rules in terms of rescinding in the 1908 Act were deliberately preserved. This includes the limits to the right to rescind and the rule that damages cannot be claimed for an innocent misrepresentation as opposed to a fraudulent one. On the other hand, it could be argued that section 15 of the 1979 Act (now section 59 of the 2017 Act) does not limit the remedies to those provided in the 1908 Act and a person could sue to recover damages for an innocent misrepresentation under section 6 of the 1979 Act (now section 35 of the 2017 Act), or could cancel the partnership agreement under section 7 of the 1979 Act (now section 37 of the 2017 Act) , or seek a remedy under section 44 of the 1908 Act. Because of the differing views on this issue, we are concerned that any drafting change in this revision Bill would amount to more than a minor issue to clarify Parliament’s intent. If feedback supports our position, the change will need to be included in a future reform Bill.
 45(1) 81 Right of outgoing partner or partner’s estate to share profits or obtain interest Clause 81(2)(b) continues the interest rate at 5%. In the Bill, we explain that an interest rate is often linked to a movable rate such as the CPI.  We have considered whether to amend the reference to apply a calculation under the Interest on Money Claims Act 2016. We have asked for feedback on this change.  If you support this change, do you think it is a minor issue to clarify Parliament’s intent that can be dealt with as a revision power under section 31(2)(i)? Or does it need to be dealt with in a future reform Bill?

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