LAC Guidelines Chapter 7: Relationship to existing law

Introduction

Part 1: Has the Interpretation Act 1999 been considered?

Part 2: Have all other relevant legislation been considered?

Part 3: Has the common law been considered?

Part 4: Are transitional or savings provisions required?

Background

New legislation is never complete and entire unto itself. It is in greater or lesser degree part of a larger legal continent. It may have to be read with

• the legislation which it amends (as almost all does even if not described as amending legislation);

• legislation which applies to it (by its own express terms, or implicitly, or because the new legislation so provides);

• the general body of the law of legislative interpretation; and

• relevant aspects of the general law.

These issues are in part technical. They can also raise important issues of policy. That can be illustrated by one instance of the last item on the list. Assume a statute which places a duty on individuals and provides for a criminal penalty for breach of the duty. Is the statutory provision exhaustive? Or is the general law of remedies relevant? What, for instance, is the position of a person claiming to be a beneficiary of the rule which imposes that duty? The policy answer to that set of questions may be implemented at the technical level, for instance by providing for remedies and expressly stating them to be exhaustive, by expressly invoking remedies outside the legislation, or by recognising that the legislation will operate within the scope of other legislation (such as the Illegal Contracts Act 1970).

The enforcement issue (considered further in chapters 11 and 12) is but one of many points of contact between a particular piece of legislation and the rest of the law. Thus the rest of the law determines or at least deals with such matters as:

• the territorial scope of the law (territorial waters, contiguous zone, Antarctica, Tokelau ...);

• the personal scope of the law (does it apply to the Crown and to legal persons);

• the temporal scope of the law (retroactivity, effect of repeals on existing legal situations);

• the association of powers (for instance a statutory power of appointment usually attracts a power of dismissal);

• controls on the exercise of powers (for instance through the principles of natural justice or by way of appeal, under general provisions of the statutes relating to the Courts, the Ombudsmen, the Controller and Auditor-General, the Official Information Act, or local government legislation); or

• other consequences of the breach of legislation (is the action done in breach invalid, or can it be validated, or does the breach have no effect?).

Some of these matters are considered in other chapters of these Guidelines and are also discussed in some detail in Report No 17 of the Law Commission on A New Interpretation Act (1990) paras 192-227, 332-438 and pp 215-218.

A careful consideration of how proposed legislation will relate to the existing law will have the following advantages:

• The existing law may already, with or without some modification, provide a means of achieving the policy objective, thus avoiding the need for the proposed legislation;

• The existing law may give useful precedents for achieving the policy objective;

• Inconsistency or overlap between the existing law and the proposed legislation will likely be identified and, as a result, avoided;

• An examination of the existing law may reveal reasons why the proposed legislation should be modified or not proceeded with, or safeguards that should be included (for example, the rule against self-incrimination);

• The inclusion of the proposed legislation in its proper place in, and its consistency with, the existing law should assist public understanding and acceptance of the proposed legislation and of the law as a whole;

• An examination of the existing law may indicate the need for transitional or savings provisions, particularly if an existing legislative regime is being replaced by another.

Issues

The following issues are discussed in this chapter:

Part 1: Has the Interpretation Act 1999 been considered?

Part 2: Has all other relevant legislation been considered?

Part 3: Has the common law been considered?

Part 4: Are transitional or savings provisions required?

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In general, new legislation should be consistent with the Interpretation Act 1999 and matters that are already provided for in the Interpretation Act 1999 should not be restated in new legislation.

The Interpretation Act applies to New Zealand Acts and Regulations except to the extent that the Act or Regulations provides otherwise. The Interpretation Act defines "Regulations" as including most subsidiary legislation.

The Interpretation Act contains provisions relating to, among other things, the following:

• Principles of interpretation;

• Commencement of legislation;

• Exercise of powers granted by legislation;

• Repeals of legislation;

• Amendment of legislation;

• Making, amending and revoking regulations;

• Use of prescribed forms;

• Application of legislation to the Crown;

• Meaning of specific terms and expressions in legislation.

The Interpretation Act is set out in Appendix 4 to these Guidelines.

Unless there are good reasons for departing from the provisions of the Interpretation Act, new legislation should be consistent with that Act. In particular, terms defined in the Interpretation Act should generally not be defined to have different meanings in other legislation.

It is generally not desirable to restate in new legislation matters that are already provided for in the Interpretation Act. An exception to this is where it is considered helpful to users of new legislation to restate the meanings of terms defined in the Interpretation Act.

The Interpretation Act should be considered when new legislation is being prepared.

In general—

• new legislation should be consistent with the Interpretation Act;

• terms defined in the Interpretation Act should have the same meanings in the new legislation;

• matters provided for in the Interpretation Act should not be restated in new legislation.

If there is doubt as to the meaning or application of any provision of the Interpretation Act, Parliamentary Counsel should be consulted.

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New legislation has to be read in conjunction with any legislation which it amends and other legislation which also applies to the same matters. It is important that new legislation be consistent with existing legislation as far as practicable.

Almost all new legislation deals with matters that are already governed to a greater or lesser extent by other legislation (including the New Zealand Bill of Rights and the Human Rights Acts referred to in Chapter 4). It is important that new legislation not be in conflict with other legislation. If there is a conflict, the new legislation should make it clear which legislation prevails.

The purpose of new legislation is often to impose or grant duties, powers or restrictions that are similar to those imposed or granted in other legislation. It is desirable that legislative provisions having a similar purpose are as similar as practicable, both as to policy and drafting. It is unhelpful to users of legislation and the Courts if provisions that are intended by Parliament to have the same effect are expressed in different ways, as this allows arguments to the effect that differences in expression were intended to reflect policy differences.

In some cases, existing legislation may or can be used to supplement new legislation, either because the existing legislation is of general application or because it is expressly applied by the new legislation. In general, where existing legislation can be used in this way, it is preferable not to duplicate the relevant provisions of the existing legislation in the new legislation. Duplication often results in unintended differences, especially as legislation is amended over time.

Fortunately, it is now possible to search all existing legislation by electronic means, making it much easier to identify existing legislative provisions that should be considered in the development of new legislation. This searching capability should be used whenever new legislation is being prepared.

Before commencing the preparation of new legislation, those responsible should identify all existing legislation that either relates to the same matters as the new legislation or implements policies that are similar to those of the new legislation.

Unless there are good reasons for not doing so, precedents from existing legislation should be used when new legislation is being prepared. If there are conflicting precedents, the best precedent should be used even if it is not the most recent. In general, avoid "reinventing the wheel".

In general, new legislation should not restate matters that are already provided for in other legislation. If likely to be helpful for users, new legislation may include a short "flag" provision identifying (but not restating) the relevant provisions of the other legislation.

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In addition to legislation, there is a large body of Judge-made law which is usually referred to as the "common law". Important examples of the common law are the basic principles referred to in Chapter 3.

As noted in Chapter 3, any new legislation should be consistent with the basic principles of New Zealand's legal and constitutional system. In addition, new legislation should as far as practicable be consistent with the common law. An obvious exception to this is where the purpose of the legislation is to alter the common law.

Legislation and the common law together form the law of New Zealand. New legislation may of course, and often does, alter the common law, but should be written so as to be consistent with the relevant law that remains. Those preparing new legislation should therefore be as aware as possible of those parts of the common law that relate to the matters to be affected by the new legislation.

It is not always easy to ascertain how the common law, which is a large and evolving body of law, will apply to particular matters. However, considerable assistance can be obtained from publications such as Halsbury's "Laws of England" and Butterworths "Laws of New Zealand", as well as from specialist texts on particular branches of the law.

Those preparing new legislation should acquaint themselves as far as possible with those parts of the common law that impact on the matters to be covered by the legislation, with a view to ensuring that the legislation—

• will not be inconsistent with the common law, unless this is the clear policy intent; and

• does not address matters that are satisfactorily dealt with by the common law. Duplication of this kind often results in considerable uncertainty in the law.

Before commencing the preparation of new legislation, those responsible should ascertain how the common law applies to the matters to be covered by the new legislation. Publications such as Halsbury's "Laws of England", Butterworths "Laws of New Zealand", and specialist texts should be consulted.

New legislation should not be inconsistent with the common law unless this is the clear policy intent.

In general, matters satisfactorily dealt with by the common law should not also be addressed in new legislation, as duplication of this kind can result in considerable uncertainty in the law.

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This chapter concerns enactments that change the law. It is about the 2 kinds of provisions that the enactments might need to deal with situations in existence when the enactments come into force.

One kind of provision is called a savings provision. Section 231 of the Sale of Liquor Act 1989 is an example of a savings provision—

“231 Certain licences deemed to be on-licences
(1) Every licence of a kind to which this section applies that was in force under the Sale of Liquor Act 1962 immediately before the commencement of this Act shall be deemed for the purposes of this Act to be an on-licence.
(2) This section applies to licences under the Sale of Liquor Act 1962 of the following kinds:
(a) Hotelkeepers’ licences:
(b) Special hotelkeepers’ licences:
(c) Extended hotelkeepers’ licences:
(d) Tourist-house keepers’ licences:
(e) Tavernkeepers’ licences:
...”.

The other kind is called a transitional provision. Section 142(1) of the Credit Contracts and Consumer Finance Act 2003 is an example of a transitional provision―

“142 Election for Act to apply
(1) A creditor under a credit contract made before the commencement of this section may, after the commencement of this section, elect that this Act apply to the credit contract and any guarantee made in connection with the credit contract from a particular date (the effective date).”

Two preliminary points

The examples illustrate 2 points that it is worth drawing attention to. First, savings and transitional provisions are not always entitled “savings” or “transitional”, although sometimes they are. Second, the distinction between savings and transitional provisions is very fine. The second and third questions below define savings and transitional provisions separately to help policy analysts understand why 2 words are used. However, it makes no legal difference whether a provision is, when fully analysed, a savings or a transitional provision.

When are savings or transitional provisions needed?

Savings or transitional provisions may be needed in enactments that change the law. An enactment may change the law by—

• amending another enactment
• repealing another enactment
• repealing another enactment and replacing it
• being itself a new enactment.

What is a savings provision?

A savings provision saves something that, if it were not saved, would be altered or abrogated by an enactment. Things that might need saving include an existing law or a status provided by an enactment.

An enactment that overturns the effect of a court decision provides an example. The enactment would use a savings provision to make it clear that the overturning does not apply to the case in which the decision was made (see, for example, Commerce (Clearance Validation) Amendment Act 2001, section 3).

Another example is an enactment that restructures an organisation into another organisation. A savings provision would be used to make it clear that the employees of the old organisation are the employees of the new organisation (see, for example, New Zealand Stock Exchange Restructuring Act 2002, section 14).

What is a transitional provision?

A transitional provision explains how an enactment applies to circumstances that, having arisen in the past, will be affected by the enactment’s coming into force. Circumstances for which transitional provisions might be needed include the existence, when the enactment comes into force, of persons holding office or proceedings before a court.

The existence of persons holding office was the subject of Claydon v Attorney-General [2002] 1 ERNZ 281. Members of the Employment Tribunal were in office under the Employment Contracts Act 1991 when the tribunal was replaced by the Employment Relations Authority under the Employment Relations Act 2000. Some of the members claimed that they should have the benefits of office until the end of the term of office. The Court of Appeal dismissed the claim because the transitional provisions in sections 249 to 252 of the Employment Relations Act 2000 showed that the legislative intention was to curtail the members’ rights as tribunal members on 31 January 2001.

The existence of proceedings was the subject of a series of cases under the Resource Management Act 1991. The cases involved the interpretation of the transitional provisions in section 112 of the Resource Management Amendment Act 2003. The question was whether the provisions required an appeal to be decided under the law as it was before the amendment or the law as it was after the amendment. Two cases decided in favour of the former and two in favour of the latter. (See New Zealand Nut Producers Limited v Otago Regional Council EnvC C99/2004.)

Do savings and transitional provisions matter?

Non-existent or inadequate savings or transitional provisions can result in litigation.

Non-existent transitional provisions was the problem in Chief Adjudication Officer v Maguire [1999] 2 All ER 859. The Court of Appeal had to decide whether a person who satisfied the statutory criteria for a particular allowance was entitled to claim it. The statute that provided the allowance had been repealed and the repealing enactment contained no transitional provisions. In his judgment, Clarke L J stated that the case “underlined what was in any event surely quite clear, namely the importance of including clear transitional provisions in statutes of this kind” (page 872).

Inadequate transitional provisions can lead to considerable difficulty, and judges sometimes criticise their drafting in their judgments.

As a reminder of the care which must be taken with savings and transitional provisions, it is worth mentioning 2 cases in which apparently unexceptionable transitional provisions resulted in litigation.

Foodstuffs (Auckland) Ltd v Commerce Commission [2004] 1 NZLR 145 is a case heard by the Privy Council. In the High Court and the Court of Appeal in New Zealand, the case was argued on the basis that the transitional provision in the Commerce Amendment Act 2001 did not apply because, when it said that nothing in the amendment Act affected “any proceedings commenced” before the commencement of the Act, it meant only court proceedings. It did not include proceedings before the Commerce Commission. However, the Privy Council found that “proceedings” did cover proceedings before the Commerce Commission.

Dossett v TKJ Nominees Pty Ltd [2003] HCA 69 is a case heard by the High Court of Australia. The transitional provision in the Workers Compensation and Rehabilitation Amendment Act 1999 provided that the new, restrictive, provisions being put in the principal Act by the Amendment Act did not apply in 2 situations described in the transitional provision. The High Court said that, if the intention was that the restrictive provisions did not apply only in those 2 situations, the transitional provision should have said so. The court held that the new restrictive provisions did not apply in the situation before it, which was not one of the 2 described.

What process should policy analysts follow?

Policy analysts developing enactments should follow a 4-step process.

The first step is to be aware from the start of the project that savings and transitional issues might arise. Analysts must make sure that the project plan allows them time to give the issues thorough consideration.

The second step is to study the Interpretation Act 1999.

Section 7 of the Act, together with the common law, provides that enactments do not have retrospective effect unless given it by express words or clear implication. This means that the basic rule is that an enactment applies only to what happens in the future. If an enactment must apply to things that happened in the past, a transitional provision is necessary to explain how it applies.

Sections 17 to 22 of the Act deal with the effect of the repeal of enactments. In summary, the sections provide that—

• the repeal of an enactment does not affect—
  • an action done before the repeal (section 17(1)(a))
  • an action done under the enactment before its repeal (section 17(1)(e))
  • the operation of the enactment before its repeal (section 17(1)(e))
  • things in existence at the repeal (section 17(1)(b) and (c))
  • the completion of anything under the repealed enactment (section 18(1); see discussion of this below)
  • the bringing or completion of proceedings under the repealed enactment (section 18(1))
  • liability to a penalty for an offence against the enactment before its repeal (section 19)
• an action done in the exercise of a power under the repealed enactment continues to have effect (section 21)
• delegated legislation made under a repealed enactment continues in force (section 20)
• the repeal of an enactment does not affect—
  • an enactment in which the repealed enactment is referred to; if the repealed enactment is replaced, however, the reference is read as a reference to the replacement enactment (section 22)
  • an amendment made by the enactment to another enactment (section 17(1)(d))
• the repeal of an enactment does not revive—
  • an enactment that has been repealed (section 17(2))
  • a rule of law that has been abolished (section 17(2))
  • any other thing that is not in force or existing at the repeal (section 17(2)).

(See also Chapter 3A Statutory Interpretation.)

Sections 7 and 17 to 22 of the Interpretation Act 1999 give rise to the following 4 situations:

• the sections in the Interpretation Act 1999 cover all the savings and transitional issues that the enactment raises

• the sections in the Interpretation Act 1999 cover all the savings and transitional issues that the enactment raises but, for some or all of the issues, in a way that is not satisfactory in the circumstances dealt with in the enactment

• the sections cover some of the savings and transitional issues that the enactment raises but something about the enactment makes it desirable to deal with the rest of the issues in customised savings or transitional provisions

• it is not clear whether or not the sections in the Interpretation Act 1999 cover all the savings and transitional issues that the enactment raises.

In the first situation, the enactment does not need its own savings or transitional provisions.

In the last 3 situations, savings and transitional provisions must be drafted specifically to cover the issues. The specifically drafted provisions will take precedence over the provisions of the Interpretation Act 1999. (Section 4 of the Act provides that the Act applies to every New Zealand enactment unless the enactment provides otherwise or the context of the enactment requires a different interpretation.)

The third step for policy analysts is to decide which situation their enactment is in. To decide this, policy analysts must bring to mind all the relevant circumstances that have arisen in the past and that might be affected by the coming into force of the enactment. They must consider each circumstance carefully against the provisions in the Interpretation Act 1999.

The fourth step for policy analysts is to make sure that each circumstance is described by one of the following:

• it is not affected by the coming into force of the enactment and does not need to be covered by a savings or transitional provision

• it is affected and is covered by a provision in the Interpretation Act 1999

• it is affected and is dealt with in their instructions to PCO for a specific provision in the enactment.

Where do savings and transitional provisions go?

Savings and transitional provisions are almost always assembled and presented at or near the end of an enactment. However, there are 2 variations on this. The variations are not used often but they are useful for policy analysts to know about.

First, the provisions may be put in an enactment of their own. This option is convenient if a great many savings and transitional provisions are necessary. An example is the Animal Products (Ancillary and Transitional Provisions) Act 1999, which deals with the transition from the Meat Act 1981 to the Animal Products Act 1999.

Second, the provisions may be put in regulations made under the enactment. This option is convenient if it is not possible to foresee all the transitional matters that might arise from an Act. However, it is usually constitutionally improper for regulations, which are made by the executive, to alter an Act, which is made by Parliament. Consequently, an Act may include an empowering provision for such regulations only in rare circumstances and only if the empowering provision contains safeguards. The circumstances and the safeguards are found in reports by Parliament’s Regulations Review Committee (see first report (1995) AJHR I. 16C and second report (1996) AJHR I.16G; this material is available on the page for the New Zealand Centre for Public Law at www.vuw.ac.nz).

Are there special cases to be aware of?

Two special cases are worth mentioning.

First, there is the case of a course of action initiated under a repealed enactment. The question is which enactment it should be completed under—the repealed enactment or the replacement enactment. This is a special case because of the way that the Court of Appeal has interpreted section 18 of the Interpretation Act 1999. Section 18 deals with the issue of things initiated under an enactment that is being replaced. The Court of Appeal has interpreted section 18 as saying that it is only things relating to an existing right, interest, title, immunity, or duty that may be completed under the repealed enactment (see Foodstuffs (Auckland) Ltd v Commerce Commission [2002] 1 NZLR 353). Consequently, if the policy is that everything initiated under a repealed enactment is to be completed under the repealed enactment, the replacement enactment needs a transitional provision clearly saying so.

Second, there is the case of income tax enactments. This is a special case because the enactments use the terms “repeal” and “revoke” in a distinctive way. In general legislation, an Act, or a provision of an Act, that is repealed is no longer alive and cannot be amended. In income tax legislation, however, an Act or provision that is repealed stays alive for the tax and income years it covers and so can be amended. This position has been made clear in the Income Tax Act 2004. Section YA 1(1) (Repeals) repeals the ITA 1994, but section YA 1(2) specifically states that the repeal applies only to the tax on income derived in the 2005–06 year and later years. The ITA 1994 continues to exist and can be amended in the same way as any other existing statute. (What is said in this paragraph about the repeal of Acts applies equally to the revocation of delegated legislation.)

Policy analysts developing enactments must pay attention, right from the start, to savings and transitional issues. They must allow time for the issues to be considered thoroughly. They must make sure that circumstances affected by the coming into force of the enactment are covered by a provision of the Interpretation Act 1999 or a specific provision in the enactment.

Policy analysts should seek advice on these matters from their departmental lawyers, who should have no hesitation about consulting Parliamentary Counsel.

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