WINTER 2013 1

AdvocateWinter 2013

The quarterly magazine of the Young Lawyers’ Committee Wellington

Space tourismChinese refugee lawDa Vinci who?

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WINTER 2013 03

YLC Advocate Winter 2013

Editors: Lizzie Chan & Hamish McQueen

Layout: Rebecca Walthall

Cover photograph by flickr user Ewan-M

04Editors’ Note

07Convenor’s Note

08YLC Committee

09What’s New with

Nadia Gastaldo-Brac?

10YLC Quiz Night

— 30 May

11Speed Dating

— 4 July

12Space Tourism: A New Frontier

— Leah Hamilton and Emma McCann

14Great Gatsby Movie

Night — 11 June

16New Zealand Public Health and Disability

Amendment Act 2013: in Contempt of the

Rule of Law — Jessica Braithwaite

18Classic White Tee:

Wear it Three Ways — Ani Chan

20A Step Forward:

China’s New Exit-Entry Law and

Legal Protection for Refugees in China

— Lili Song

22Wine and Cheese

— 19 July

23YLC Constitution

Conversation — 24 June

24United States v

Windsor and the Unconstitutionality of the Defense of Marriage Act 1996 (US): What does it actually mean for

same-sex marriage in America?

— Jennifer Howes

26Another Good Day at the Office! — 18 July

28Case note on s 9 of the Fair Trading Act 1986: Poplawski v Pryde —

Nick Mereu

30Da Vinci who? An

interview with Judge Arthur Tompkins

— Lucy Revill

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*Interest rates are subject to change. Medical Securities Limited’s (MSL’s) normal lending criteria apply for all credit and loans, and your application is subject to acceptance by MSL. This offer is available for new loans only.

Whether your practice could do with an equipment upgrade, or you like the idea of parking a new car outside of it, there’s never been a better time to talk to MAS. To take advantage of this highly competitive offer, along with all the additional benefi ts that come with a MAS loan, contact us today on 0800 800 627 or email loans@mas.co.nz.

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04 YLC ADVOCATE

The concept of the rule of law is the foundation stone of New Zealand’s constitutional arrangements. Regardless of political persuasion, we, as lawyers, should be concerned when branches of government do not follow basic constitutional procedure. Indeed, we would go further and suggest that lawyers have a duty to bring breaches of the rule of law to the attention of law-makers and the public generally. The Law Society’s submission is an important aspect of this function.

The boundaries of the concept of the rule of law are contested, but at its heart is the principle that the actions of the executive branch of gov-ernment must be consistent with the law, and that citizens must be able to turn to the courts to determine whether executive action is legal. Therefore, it is particularly concerning that the Law Society has identi-fied five statutes passed in the last three years that oust the courts’ review jurisdiction, and three enactments from the last three years that contain unjustified Henry VIII clauses (clauses that enable Acts of Parliament to be overridden by executive regulation). While New Zealand has a gen-erally good human rights record, our relatively informal constitutional arrangements mean that lawyers need to be especially vigilant and to call our leaders to account when breaches of due process and the rule of law occur.

A particularly concerning piece of legislation noted by the Law Society’s submission is the New Zealand Public Health and Disability Amendment Act 2013. This Act ousts the courts’ jurisdiction to consider any discrimination challenge of government policies on payment for providing health and disability services to specified family members. In effect, this Act prevents the government from being subject to the scru-tiny of the sort that led the Court of Appeal to find that blanket policies against such payments were contrary to the New Zealand Bill of Rights Act 1990. Compounding the fact that this Act prevents the courts from considering whether government policy breaches the Bill of Rights, is the rushed manner in which this legislation was passed. Despite the Attorney-General reporting to Parliament that this Act was inconsistent with the Bill of Rights, the Bill passed into law under urgency in a sin-gle sitting day, bypassing public participation or informed debate. The Law Society wrote to the Attorney-General describing both the ouster of the courts’ jurisdiction and the manner in which this legislation was passed as “quite alien to our expectations of the parliamentary process”. Whether one agrees with the policy behind this legislation or not, the willingness of the Government to remove citizens’ rights of access to the courts and to rush such legislation through the House must be a cause for serious concern. You can read more about this Act and the rule of law concerns it raises inside this issue in an article by Jessica Braithwaite.

In July this year, the New Zealand Law Society made a submission to the United Nations

Human Rights Council stating that: “The Law Society is concerned that a number of recent

legislative measures are fundamentally in conflict with the rule of law.”1

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Editors’ note

1 New Zealand Law Society Human Rights and Privacy Committee “Submission to the 18th Session of the Human Rights Council” (July 2013), available at <www.lawsociety.org.nz>.

Lizzie Chan and Hamish McQueenE DI TOR S

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WINTER 2013 05

What would you like to see included in the

YLC Advocate?We’d love to hear any feedback about the

magazine — especially from potential contributors! So please get in touch at elizabeth.chan@justice.

govt.nz or hamish.mcqueen@justice.govt.nz.

Upcoming Events

September

NZBA/YLC Mooting Competition begins

“Bridging the Gap” mentoring careers

evening

“Bridging the Gap” mentoring dinners

October

Oktoberfest

Final “Bridging the Gap” drinks

NZBA/YLC Mooting Competition heats

7-9 Oct

NZBA/YLC Mooting Competition semi-finals

16–17 Oct

NZBA/YLC Mooting Competition finals

24 Oct

Wellness seminar

November

Toast Martinborough

YLC Christmas party

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In addition to Jessica’s article, this issue of Advocate contains a great range of articles and interviews on a variety of legal topics. In the final of a three-part series on space law, Leah Hamilton and Emma McCann explore the legal issues around space tourism, in particular the status of space tourists and the effects of space tourism on the environment. Jennifer Howes asks what the recent United States Supreme Court deci-sion United States v Windsor means for the future of same-sex marriage in America. Lili Song discusses China’s new entry-exit law, and what it means for the legal protection of refugees in China. Nick Mereu pro-vides a case note on a recent Fair Trading Act case to come out of the Court of Appeal, Poplawski v Pryde. Plus, Lucy Revill follows up her article on art law from the last issue of Advocate with an interview with art law expert Judge Arthur Tompkins, who was quoted in Dan Brown’s latest bestselling novel Inferno. Make sure to take some time to check out the impressive array of research and writing on display from young lawyers in Wellington!

As always, we also have the low-down on all the latest news and pho-tos from YLC events that have happened around town. Inside this issue we have reviews of the Quiz Night, Speed Dating, and Wine and Cheese events — which, as always, provided great opportunities to catch up with old friends and meet new young lawyers. On the professional de-velopment side of things the YLC also hosted a professional wellbeing seminar, “Another Good Day at the Office!”, and a constitutional review event promoting awareness of the submission process for the govern-ment’s Constitutional Advisory Panel. Plus, there was a Great Gatsby movie night, which provided a warm-up for the highlight of the YLC’s social calendar — the Young Professionals’ Ball. The Ball will be held on 31 August, make sure to get your ticket! Remember to sign up too for the inaugural New Zealand Bar Association/YLC Mooting Competition, which will be held in September and October.

For more check out the YLC website, and make sure to join our Facebook page (www.facebook.com/younglawyerscommittee) to keep up to date with the latest YLC activities.

We also thank the YLC’s general sponsors: the Medical Assurance Society and JLegal. Thanks also to Rebecca Walthall our amazing designer and illustrator. We also thank our Advocate marketing guru, Annabel Martin, for her help in securing advertising for this year’s issues of Advocate.

There are numerous roles open to New Zealand lawyers wanting to work overseas so make the move now – gain international experience, increase your earnings and travel the world!

Through our global network of JLegal offices, we recruit lawyers with the leading law firms and corporations in the Australia, UK, US, Asia, Middle East, North & South America and the Offshores (including Cayman Islands, BVI, Channel Islands, Bermuda, Luxembourg and Malta).

For a confidential discussion about making the leap overseas, contact Damian Hanna today at damian.hanna@jlegal.com.

Your next career leap – made easy by JLegal.

New Zealand

Singapore

Middle East

ChinaLondon

Australia

Hong Kong

new zealandlevel 1, 124 willis street, wellington t | +64 4 499 5949

www.jlegal.com find jlegal onnew zealand melbourne sydney london singapore uae hong kong

JLegal were formally know as Simply Legal.

WINTER 2013 07

In the last few months there seems to have been an unusually high number of lawyers falling foul of the law and their professional obligations, not

to mention their communities and the clients they serve. Whether there has actually been a rise in such cases, or the cases have simply been more scandalous and attractive to the media, it doesn’t

present a pretty picture to the public or help public perceptions of lawyers.

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Convenor’s noteJamie Grant

Y LC C ON V E NOR

I’ve just returned from a long trip driving across the United States. In the 4,000 miles (about 6,500 km) we drove, a good half to two thirds of the roadside billboards I saw featured advertising of legal services. I found the concept of roadside advertising for lawyers odd – I can-not imagine anyone in New Zealand retaining anyone who advertised in this way (not that such advertising is allowed for a large part of the profession anyway). The actual content of the billboards was often even more bizarre. My favourite was a large billboard just outside of Las Vegas proclaiming, “Wrong Spouse? Right Lawyers!” As an insolvency lawyer myself, I also found it strange to see so many advertisements offering to put you into bankruptcy “in record time” and “at competitive rates”. In New Zealand, bankruptcy is avoided rather than embraced as a “get out of jail free card”. Even if you chose to put yourself into bankruptcy, it is free and relatively easy to do here.

The other aspect of the American legal profession which surprised me was the aversion people feel towards lawyers. As a general rule, people really do hate lawyers. When I asked people why, it was apparently due to both nervousness about what you could do and say around lawyers, and also a general dislike for the nature of the American legal profession. Americans are really terrified about being sued, and they resent lawyers for that. That said, Americans resort to legal advice and legal recourse on such a regular basis that it is simply part and parcel of American life.

I returned to New Zealand feeling extremely heartened about our pro-fession here. We’re not nearly as litigious. Not only do we avoid bringing law suits to resolve every dispute (and Americans really will sue over anything), even over commercial matters, New Zealand lawyers will of-ten recommend practical solutions other than litigation – particularly where the sums involved are small. Because people aren’t terrified of being sued, they don’t go to lawyers for advice over everything as they would in the United States. Because of this non-litigious culture in New Zealand, people do not generally hold ill will against practitioners, and the profession is respected as just that – a profession.

That said, the present position in the United States seems to be based on two primary factors. First, the culture of litigiousness seems to arise from the ability to sue for personal injury. The second is the large num-ber of lawyers pumped out of law schools combined with the lack of jobs, which encourages ambulance chasing. Although the legal job market is similarly tight here, New Zealand is unlikely ever to have the num-ber of inexperienced solo sharks that exist in the United States due to our supervision requirements and restrictions on independent practice straight out of law school. We should, however, be careful about ever re-moving these requirements while our law schools continue to produce so many law graduates. There are always disputes to be resolved, so if the supply of lawyers matches (or exceeds) the demand for litigation, particularly when the lawyers in question are young, hungry and free-roaming, then a culture of litigiousness is likely to rise.

There are numerous roles open to New Zealand lawyers wanting to work overseas so make the move now – gain international experience, increase your earnings and travel the world!

Through our global network of JLegal offices, we recruit lawyers with the leading law firms and corporations in the Australia, UK, US, Asia, Middle East, North & South America and the Offshores (including Cayman Islands, BVI, Channel Islands, Bermuda, Luxembourg and Malta).

For a confidential discussion about making the leap overseas, contact Damian Hanna today at damian.hanna@jlegal.com.

Your next career leap – made easy by JLegal.

New Zealand

Singapore

Middle East

ChinaLondon

Australia

Hong Kong

new zealandlevel 1, 124 willis street, wellington t | +64 4 499 5949

www.jlegal.com find jlegal onnew zealand melbourne sydney london singapore uae hong kong

JLegal were formally know as Simply Legal.

08 YLC ADVOCATE

Althea Carbon

Amberley James

Annabel Martin

Bevan O’Connor

Daniel Fielding

Elizabeth Chan

Emma Currie

Guy Carter

Hadleigh Pedler

Hamish McQueen

Heléna Cook

Helen Arathimos

Ian Miller

Jamie Grant

Jelena Gligorijevic

Jess Davies

Jess Willis

Jessica Braithwaite

Jordan Williams

Katie Williams

Katrina Kelly

Kerrin Eckersley

Lorraine Hercus

Mallory Ward

Monica Hamlyn-Crawshaw

Natalie Pierce

Nadia Gastaldo-Brac

Nigel Salmons

Nikki Farrell

Penelope Skinner

Richard Evans

Rikky Minocha

Sam Mossman

Simon Wilson

Tim Cochrane

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Committee Members

YLC Executive 2013

Convenor

Jamie Grant

Deputy Convenors

Heléna CookElizabeth Chan

Treasurer

Daniel Fielding

Secretary

Lorraine Hercus

Communications officer

Hadleigh Pedler

Sponsorship Officers

Guy CarterRichard Evans

Marketing/membership officers

Annabel MartinAmberley James

Magazine editors

Elizabeth ChanHamish McQueen

Advocacy, Welfare & Professional Development

officer

Natalie Pierce

WINTER 2013 09

Hi Nadia, what’s your role on the Committee?

I help to organise a variety of different events including the wine and cheese evening, the YLC Ball and the “Bridging the Gap” mentoring pro-gramme.

How long have you been on the YLC and why did you join?

I joined the YLC in December last year. I joined because I enjoy organ-ising events, and had been to various great YLC events in the past so I wanted to help out.

What do you do outside of the Committee?

I play indoor netball (which is actually with a YLC team), catch up with friends, read good books and go for lots of walks around Oriental Bay.

What’s your favourite New Zealand holiday spot?

Although it’s a bit of a cliché, I have to say Taupo is my favourite holiday spot. I always went there for summer holidays growing up and have lots of good memories of swimming in the lake, going to de Bretts and going parasailing or on the Huka Jet.

If someone asked you to give them a random piece of advice, what would you say?

I asked my flat mates to contribute on this question and one (a dentist) said, remember to always floss! Another recommended that you should never eat yellow snow and the last one said, always wear clean undies in case you get hit by a bus. My advice is something my grandma always said, which is “in the course of a lifetime what does it matter” — in other words, don’t get stressed about little things, because they will likely not matter soon.

Do you have a favourite Wellington café? If you could take a fa-mous person out to lunch there who would it be?

At the moment my favourite café is Arthurs on Cuba Street, I love all their vintage servingware and their old style food. I got a ticket for Beyoncé’s concert today, which I’m very excited about, so I would take Beyoncé out to Arthurs with me.

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What’s New with Nadia Gastaldo-Brac?

10 YLC ADVOCATE

YLC Quiz NightThe YLC recently held one of its most successful

quiz nights to date at Chicago sports café with 40 teams making for an entertaining,

if somewhat hectic night.

There were a number of spot prizes, prizes for best team name (Nesian Quiztic) and worst team name (Keeping up with the Quizdashians) and prizes for our top three teams on the night, all generously donated by our sponsors. The winning team for the evening was LOLCATS, consisting of Julia Steenson, Mark Leslie, Miles Calder and Emily Buist-Catherwood. Special thanks must go to Seamus Woods as the exceptional quiz MC and to Chicago sports café for hosting the event as well as our sponsors JLegal and MAS for making the night possible.

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WINTER 2013 11

Speed datingOn 4 July, 40 keen young professionals took part in the annual YLC Speed Dating event. This event is known for its success stories and this year’s

event proved to be no different!

Plum Café on Cuba Street was the fantastic venue where 20 males and 20 females took the chance (in very efficient 3 minute slots) to meet their future partner, a spring fling or just make a friend or two. The event was a huge success with everyone enjoying a fun and entertaining evening. There was plenty of conversation (and wine) flowing and the prepared conversation starters for nervous daters were superfluous. There’s been confirmation of several second dates (with a little less time pressure) so watch this space. If you missed out on tickets this year, make sure you get in quick for YLC Speed Dating 2014!

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12 YLC ADVOCATE

Space tourism is being touted as the ultimate holiday, the final frontier for wealthy travellers that may soon be available to the masses. It is an industry with vast potential, with commentators expecting it to be worth $1 billion in 10 years.1 Out-of-this-world opportunities for sub-orbital and even orbital flight may not be too far away, but the international legal framework fails to address key issues raised by this new technol-ogy. We need to be careful that our space parties and celestial bodies are adequately catered for, to ensure that both tourists and the environ-ment are protected. Technology is moving at a much faster rate than the international legal frameworks currently deal with: basically, the speed of light versus the speed of bureaucracy.

What is space tourism?

Space tourism has been defined as “any commercial activity offering customers direct or indirect experience with space travel”2 and a space tourist is “someone who tours or travels into, to, or through space or to a celestial body for pleasure and/or recreation”.3 To date only seven lucky (billionaire) space tourists have visited and spent time on the International Space Station. But in the near future, companies such as Virgin Galactic and Excalibur Almaz propose to offer sub-orbital and or-bital flights. Excalibur Almaz is even planning to build an orbiting space hotel (an outer-space place). Space tourism is not a concept considered in international law, as these provisions were largely drafted at the dawn of the space age, when there was no consideration at all of non-govern-mental funded private space travel.

How do you organise a party in space? ...You planet!

In the final article in this three-part series on space law, we examine space tourism, the possibility and

popularity of which is “taking off”.

Leah Hamilton and Emma McCannM I N T E R E L L I S ON R U DD WAT T S

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1 Timothy Stenovec “Space Tourism Expected To Be 41 Billion Industry Over Next 10 Years Says FAA” (22 March 2012) <www.huffingtonpost.com>.

2 Stephan Hobe and Jürgen Cloppenburg “Towards a New Aerospace Convention? SelectedLegal Issues of ‘Space Tourism’” (2004) 47 Proceedings of the Colloquium on the Law of Outer Space 377.

3 Zeldine Niamh O’Brien “Liability for Injury, Loss or Damage to the Space Tourist” (2004) 47 Proceedings of the Colloquium on the Law of Outer Space 386.

4 Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies 1966 (the Moon Treaty).

5 Agreement on the Rescue of Astronauts, the Return of Astronauts and the Return of Objects Launched into Outer Space, art 1.

6 Mark J Sundahl “The Duty to Rescue Space Tourists and Return Private Spacecraft” (2009) Cleveland-Marshall Legal Studies Paper No 09-167, Journal of Space Law (forthcoming).

7 Agreement Governing the Activities of States on the Moon and Other Celestial Bodies 1979.8 Jeff Foust “Colorado the latest state to consider spaceflight liability law” New Space Journal

(7 February 2012) <www.newspacejournal.com>; and Mark Whittington “Commercial Space Travel Liability Waiver Bill Passes Texas Senate” Yahoo! News (17 March 2011) <http://news.yahoo.com>.

Space Tourism A New Frontier

Status of space tourists

The status of space tourists at international law is an issue that needs to be dealt with, particularly in the context of an accident occurring. International law grants a special status to astronauts as “envoys for mankind” whose mission is to conduct scientific discovery.4 Because of this status, international law embodied in the Agreement on the Rescue of Astronauts, the Return of Astronauts and the Return of Objects Launched into Outer Space (Rescue and Return Agreement) provides a responsibility on states to “rescue and return” astronauts if they get into trouble.5 It is unclear whether states will have the responsibility to rescue private commercial space craft, and the Rescue and Return Agreement does not place any responsibility on commercial space flight companies to rescue and return space tourists (or astronauts for that matter!).

The safety of space tourists is one of the primary concerns for the bur-geoning industry.6 It is highly unlikely that the rescue and return provi-sions will apply to space tourists as it is a stretch to try to classify them as “astronauts” of any kind. Space tourists go to space for their own personal pleasure, requiring little training, in some instances only three days. They are unlikely to be considered “envoys for mankind” (envoys of their own egos instead, perhaps).

The Agreement Governing the Activities of States on the Moon and Other Celestial Bodies 1979 (the Moon Treaty) sets out a wider duty to rescue both “astronauts” and “personnel”,7 but is of course, limited to the moon. As the early stages of space tourism appear to be limited to sub-orbital and orbital flight, this will not be helpful in the immediate term. The Moon Treaty has also not been signed by many states.

If space tourists are not afforded protection in law, then private space flight companies need to consider liability issues in the case of an ac-cident or emergency. Personal safety waivers on the basis of informed consent are extensively used in adventure tourism worldwide and could be an option for commercial space flight. States in America have started to pass legislation to limit space flight companies’ liability for injury or death, but not for gross negligence and intentional injury.8 This legisla-tion is primarily being enacted to attract spaceflight industry to states.

It is questionable whether informed consent can really be informed in a forum such as space tourism where much risk remains unknown, espe-cially at the early stages of the space tourism industry. It is necessary to achieve the right balance between regulation and relaxation in order not to stifle the industry whilst ensuring the safety of space tourists. If li-ability waivers are deemed an appropriate way to respond to safety con-cerns, international law also needs to determine issues of responsibility for rescue and return in the case of emergencies.

WINTER 2013 13

9 See the Outer Space Treaty 1967, art IX, and the Convention on International Liability for Damage Caused by Space Objects (the Space Liability Convention) 1972 deal with environ-mental issues; and Steven Freeland “Fly Me to The Moon: How Will International Law Cope With Commercial Space Tourism?” (2010) 11 MJIL 11.

10 Martin Ross, Michael Mills and Darin Toohey “Potential Climate Impact of Black Carbon Emitted by Rockets” 1 (2010) 37 Geophysical Research Letters 1.

11 Timon Singh, “Virgin Galactic Space Tourism Flights to Start Next Year – But What’s the Environmental Cost?” Inhabitat, Transportation (28 July 2013) <http://inhabitat.com >.

12 The Moon Treaty, above n 4.13 The Antarctic Treaty 1959 provides that it is “[i]n the interests of all mankind that Antarctica

shall continue forever to be used exclusively for peaceful purposes and shall not become the scene or object of international discord”.

14 Protocol on Environmental Protection to the Antarctic Treaty 1998, annex III “Waste Disposal and Waste Management”.

15 Thomas Brannen “Private Commercial Space Transportation’s Dependence on Space Tourism and NASA’s Responsibility to Both” (2010) 75 J Air L & Com 639 at 653.

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Anousheh Ansari, spaceflight participant, spent 11 days in space and 9 days on the International Space Station under a commercial agreement with the Russian Federal Space Agency, is surrounded by Russian and American search and recovery teams on the steppe of central Kazakhstan on 29 Sept 2006.

Environmental effects

Space tourism also has the potential to have significant effects on the environments of space and Earth. In the second article in this series we discussed space junk. When there are more flights producing more waste, there is more opportunity for damage to occur, either by objects breaking up, or damage to areas landed on. The provisions protecting the environment of outer space are minimal and would probably be in-sufficient to protect satellites and space stations, and the potential dam-age to planets and celestial bodies themselves has not been considered.9

An issue closer to home is the potential effects of space tourism on Earth’s environment, that is, its contribution to climate change. The hybrid rockets that are being developed for tourist travel (as well as general space travel) produce black carbon, which can remain in the stratosphere for some time. In a study released in October 2010, climate scientists at the Aerospace Corporation said that an extra 1,000 space flights a year could increase polar temperatures by 1 degree Celsius and severely impact polar sea ice.10 This would have the potential to cause major climate change worldwide. 11

Like space,12 Antarctica is a part of the common heritage of mankind.13 The Protocol on Environmental Protection to the Antarctic Treaty im-poses in part a “polluter pays” regime to pollution in Antarctica.14 If space tourism takes off as much as we are expecting, and some space flight companies expect to offer multiple flights a day, it is very possi-ble there will be more than 1,000 flights a year.15 The climate warning should be taken seriously. A suggestion for a new protocol on the effects

of space tourism and space flights could be to include a polluter pays regime, based on the number of flights an operator makes. This sugges-tion could be a double edged sword. On one hand, it is important to not stifle this burgeoning industry which has great economic potential, but on the other, it is important to consider our responsibility to preserve the planet.

What’s the solution?

It is clear the current space law regime is insufficient to deal with space tourism, even at its early stages, let alone in the future. We believe that a new international convention should be established to deal specifi-cally with space tourism. The convention should determine the status of space tourists on commercial space flights and consider the effects of space tourism on the environments of both space and Earth. Key issues to consider will include establishing an entity to regulate the industry, allocating liability for accidents, determining what level of personal safety waiver will be sufficient, if any, and what we can do to combat the effects on Earth’s climate. In the end, the current global economic climate may have come to the aid of the planet, by severely limiting the likely number of space tourists, and the number of space launches that can occur. Perhaps Bernard Madoff and all those dubious insider trades should actually be thanked instead of incarcerated.

14 YLC ADVOCATE

The Great Gatsby Movie Night

Despite the moral of the story being that you can’t repeat the past, the Young Lawyers’ Committee

gave it a good effort, hosting a special screening of The Great Gatsby at the Lighthouse Cinema on 11 June. Wellington briefly joined the swinging 1920s for a preview of the social event of the year — “Mr

Gatsby’s” Young Professionals’ Ball to be held at the Boat Shed at the end of August.

The Committee provided champagne, and popcorn, while the attendees provided the glamour and class. The help-yourself “lolly bar” was a hit, providing ample sugar to maintain energy levels through the movie.

The cinema provided exactly the right setting of comfort and sophis-tication for Baz Luhrmann’s extravagant interpretation of F Scott Fitzgerald’s, already over-the-top, story of a 1920s mogul seeking re-demption. While sinking into the sinfully comfortable armchairs with a champagne flute in one hand, and a cone of lollies in the other, it was easy to be transported into Gatsby’s world.

Special thanks go to the staff of the Lighthouse Cinema on Wigan Street who did a superb job of looking after us! Tickets for the Ball are on sale now.

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WINTER 2013 15

16 YLC ADVOCATE

The New Zealand Public Health and Disability

Amendment Act 2013: in Contempt of the Rule

of Law

On 16 May 2013, the Government enacted the New Zealand Public Health and Disability Amendment Act 2013, which governs payments to family members who act as caregivers for disabled relatives. The Act turns a blind eye to both the procedural and substantive conceptions of the rule of law. As Professor Andrew Geddis commented on Pundit in the wake of the Act, “the Courts and Parliament don’t mess with each other’s turf. I think that bargain just got broken.”1

Background

The Ministry of Health previously maintained a policy of excluding pay-ments to family members who provided disability support services to disabled relatives. However, the Ministry would pay for an outside car-egiver to do the job. In 2010, seven parents of adult disabled children and two adult disabled children successfully argued in the Human Rights Review Tribunal (Tribunal) that the Government’s policy unlawfully discriminated against them on the basis of their family status, a prohib-ited ground in the New Zealand Bill of Rights Act 1990 (NZBORA). The Tribunal’s decision was upheld in the High Court, and then again in the Court of Appeal,2 which determined that the claimants and those like them were materially disadvantaged in comparison with the paid comparator group, either because they were not paid to provide the ser-vices or because they were denied access to services others could access. The Court of Appeal’s decision forced a Government response, which came in the form of the Act. The Act’s overall purpose is to clarify that people will not generally be paid to provide health or disability support services to family members.

Procedural shortcomings

This Government has shown alarming willingness pass legislation un-der urgency, and this Act was no exception. Introduced to the House

A universal definition of the rule of law is elusive. Those at one end of the spectrum argue that the

concept simply requires that the law is made following the correct formal procedures. Those

at the other consider that the content of the law must accord with an overarching moral code.

However, we are in New Zealand settled on one thing: the rule of law is important.

Jessica BraithwaiteC H E N PA L M E R

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1 Andrew Geddis “I think National just broke our constitution” (17 May 2013) Pundit <http://pundit.co.nz>.

2 Ministry of Health v Atkinson [2012] NZCA 184, [2012] 3 NZLR 456.

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3 Iain Lees-Galloway (16 May 2013) <www./twitter.com/IainLG/status/335223209467211777>.

by Hon Tony Ryall, the Minister of Health, on 16 May, the Bill had its first reading, side-stepped the select committee stage, then went on to its second and third reading by the end of the day. At the first read-ing, the Minister considered that his Government had “landed in a fair place” with the Act. As Hon Ruth Dyson pointed out, however, “fairness” could hardly be used to describe the process of “ramming … legislation through under urgency and extinguishing people’s right to challenge the policy of the Government.”

The normal rule is that a bill cannot be taken through more than one stage each sitting day. Urgency does away with this rule and allows the House of Representatives to extend its sitting hours. In reality, as the fusion of our executive and legislative branches is a feature of our Westminster constitutional heritage, urgency allows the executive to do what it wants as quickly as it wants, with little room for the democratic input that the select committee stage offers.

To add insult to injury, the Regulatory Impact Statement (a document which must be provided to the House when a bill is introduced setting out the problem the legislation aims to address, the options for address-ing the problem, and the costs/benefits of each option) was redacted in large part on the grounds of “legal privilege”. Iain Lees-Galloway, the Labour MP for Palmerston North, tweeted a picture of one completely blacked-out page of the RIS with the comment “so much for democra-cy”.3 In essence, parliamentarians were asked to vote on a policy under-pinned by fiscal concerns with little information before them as to the fiscal consequences of an “aye” as opposed to a “nay”.

Substantive shortcomings

Having lost one round in the Tribunal and then two in the courts, the Government was keen to ensure that its new policy stayed on its feet. Instead of doing so by ensuring that the policy did not breach the NZBORA by unlawfully discriminating against anyone on the grounds of family status, the Government decided that a better option was to re-

move the right of anyone discriminated against to complain in a legally effective forum.

The Act implements a new s 70E(2), which contains a privative or ouster clause. This means that no complaint may be made to the Human Rights Commission, and no proceeding may be commenced or continued in any court, if the complaint is, wholly or partly, based on an assertion that the legislation discriminates against a person on the grounds of marital status, disability, or family status. The Attorney-General’s s 7 NZBORA report on the Act noted its patent inconsistency with the NZBORA.

Lord Cooke, discussing comity, once described the twin pillars of de-mocracy as the operation of independent courts and a democratic legis-lature. It is axiomatic that the operation of independent courts embraces the right to access those courts. For this reason, Lord Cooke considered it beyond Parliament’s power to revoke the power of courts to judicially review government action. This did not stop the Government when it barred judicial review actions in its Canterbury Earthquake Recovery Acts, and it has not stopped it now.

Conclusion

The Act’s purpose clarifies that people will not generally be paid to pro-vide health or disability support services to family members. Whether this should be the case is a matter of politics. What is not, and should never be, up for political interference is procedurally principled law-making and a citizen’s right to access the courts to challenge executive action.

The rule of law is a critical safeguard against executive tyranny in a country that lacks a supreme law, or a written constitution to govern the power imbalance between citizen and state. We can look out and shake our heads at the status reserved for the rule of law in countries such as Zimbabwe. First, however, we might wish to look a little closer to home.

Iain

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The redacted Regulatory Impact Statement accompanying the Public Health and Disability Amendment Bill.

18 YLC ADVOCATE

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The white tee: comfortable and casual, but more complicated than being just an item to wear on your day off. Whether you dress it up or dress it down, if you get your combinations right, the white tee can be your best friend at any event.

Here are some outfits to give you a guide on how to work that t-shirt like a boss on any occasion.

Look smart in a cotton t-shirt! Key items for this look are:

• Classic blazer

• Tailored pants

• Heels

• Leather strap watch

Party like a diva in this t-shirt and leather ensemble. Key items for this look are:

• Killer heels

• Black leather

• Coloured accessories

• Sharp lippy colour and matching nail polish. Coral and orange hues recomended

Want to be stylishly comfortable? Key items for this look are:

• Loose clothing

• Casual street shoes

• Sunnies

• Urban accessories

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Ani ChanC A S E OF F IC E R, S U P R E M E C OU RT

H I N TOF C H IC.WOR DP R E S S.C OM

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Geek chic is all the hype so why not try it without the shirt?

Key items for this look are:

• Glasses with thick frames

• Tech gadgets

• Man bag

• Tapered pants

Get back to the basics with this street style. Key items for this look are:

• High-tops

• Denims

• Hoodie

• Snapback/beanie

Look preppy in a t-shirt. Key items for this look are:

• Leather bag

• Sunglasses

• Blazer

• Simple strap watch

20 YLC ADVOCATE

This is the first time that China has incorporated provisions regarding the treatment of refugees into its domestic law.

The law relating to refugees in China

Prior to the Exit-Entry Law, China had no domestic legal provisions per-taining to the treatment of refugees. The only relevant legal provisions were cl 2, art 32 of the Constitution which empowered China to grant asylum to foreigners who requested it for political reasons and art 15 of the Law on the Entry and Exit Administration of Foreigners (Foreigner Entry-Exit Law) which similarly provided that, subject to approval of the governing authorities, foreigners who seek asylum for political reasons may reside in China. The Foreigner Entry-Exit Law has been superseded by the Exit-Entry Law (art 93, Exit-Entry Law).

China ratified the 1951 Convention relating to the Status of Refugees and its 1967 Protocol (collectively referred to as the Refugee Convention and Protocol) in 1982. It was one of the first Asian states parties to these key legal instruments in refugee protection. However, since China has not codified its obligations under the Refugee Convention and Protocol in domestic law, these instruments have not become practically enforce-able in China.2 The Exit-Entry Law is the long-awaited response to the calls for greater protection of refugees in China made by both the refugees themselves and the United Nations High Commissioner for Refugees (UNHCR), which established an office in Beijing in 1982.

A Step Forward: China’s New Exit-Entry

Law and Legal Protection for Refugees in China

Lili SongP H D C A N DI DAT E AT T H E V IC TOR I A

U N I V E R S I T Y OF W E L L I NG TON

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1 The full text of the law in Chinese and English is available at the website of China Consulate Services <http://cs.mfa.gov.cn>. For the purposes of this article, unless otherwise indicated by the context, China refers to the mainland People’s Republic of China, excluding Hong Kong, Macau and Taiwan.

2 Strictly speaking, treaties ratified by China do not automatically become part of domestic law and hence do not automatically become enforceable in China, although a few treaties pertaining to commercial and civil matters have been directly applied by Chinese courts. See Hanqin Xue and Qian Jin “International Treaties in the Chinese Domestic Legal System” (2009) 8 Chinese Journal of International Law 299 at 300.

On 1 July 2013, the Exit and Entry Administration Law of the People’s Republic of China (Exit-Entry Law) came into force.1 According to art 46 of the Exit-Entry Law, foreigners who apply for refugee status may stay in China with temporary identity

certificates issued by public security organs during the assessment of their application and foreigners

who are recognised as refugees may stay or reside in China with refugee identity certificates

issued by public security organs.

Lili

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The entrance of Exit-Entry Administrative Bureau of the Shanghai Public Security Bureau

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3 UNHCR “UNHCR Regional Presentation for China and Mongolia Fact Sheet” (March 2013) UNHCR <www.unhcr.org>. These figures only include refugees and asylum-seekers regis-tered with the UNHCR.

4 UNHCR “UNHCR Regional Representation in China” UNHCR <www.unhcr.hk>.5 Chengdu Liu “Thoughts on Improving Refugee Administration by the Exit-Entry

Administration Department of Public Security Authorities” (2000) 4 Journal of Beijing People’s Police College 46 at 47, in Chinese.

6 North Korean escapees are seen as illegal migrants by the Chinese Government and often face deportation when caught by the Chinese authorities. The ethnic Kokang and ethnic Kachin were displaced by armed conflicts between the Government troops and ethnic military groups in Myanmar and entered Yunnan Province, China in 2009 and 2011–2012 respectively. The Chinese Government opened temporary camps and provided food and medicine for the Kokang until they voluntarily returned to Myanmar. The Kachin hardly received any aid from the Chinese Government but were generally allowed to stay in China before August 2012.

7 Olivier Rukundo “China’s New Exit-Entry Law” (1 Oct 2012) Fahamu Refugee Legal Aid Newsletter <http://frlan.tumblr.com>.

8 UNHCR, above n 3.

The current situation of refugees and asylum seekers in China

According to the UNHCR, as of March 2013, there were 301,316 refugees and asylum seekers in China. Among them, 300,895 were Indochinese refugees who came in the late 1970s and 1980s and their descendants; 160 were non-Indochinese refugees identified by the UNHCR office in Beijing (UNHCR refugees); and 261 were asylum-seekers.3

The Indochinese refugees are living in a situation of full de facto local in-tegration. Most of them have a Chinese identity card, enabling them to enjoy social-economic rights on par with Chinese citizens. In compari-son, the UNHCR refugees, as well as the asylum-seekers, are allowed to stay in China temporarily until the UNHCR finds third-country resettle-ment for them or repatriation to their home country becomes possible. The UNHCR refugees hold travel documents issued by the UHNCR; the Chinese authorities have not issued identity documents to them.

These refugees’ lack of legal status under the Chinese law has given them a sense of insecurity. The UNHCR refugees, in particular, are under sig-nificant psychological and financial pressure because they have no right to work in China and have to rely on the UNHCR for assistance in terms of food, accommodation, health care and education.4 For example, in the early 1990s, more than 30 UNHCR refugees protested several times at the UNHCR’s Beijing office and diplomatic compounds in Beijing.5 By formally recognising the refugees’ and asylum-seekers’ right to stay in China, the Exit-Entry Law provides a legal ground for improving the refugees’ and asylum-seekers’ situation in China.

The Exit-Entry law: a positive step but more progress is needed

Unfortunately, the Exit-Entry law is silent on who qualifies as a refugee as well as the procedures for refugee status application and determina-tion. China has not established a mechanism for refugee status determi-nation (RSD). At present, the UNHCR Beijing office is the only organi-sation that conducts RSD in China. Not everyone who may qualify as a refugee has access to the UNHCR. For example, China had repeatedly declined the UNHCR’s request to access the North Korean escapees and the displaced ethnic Kokang and Kachin from Myanmar.6 The lack of a Chinese RSD mechanism and the limited access to the UNHCR may hinder de facto refugees and asylum-seekers from enjoying the rights under article 46 of the Exit-Entry Law.

As a UNHCR refugee in Beijing put it, “it remains to be seen how China will implement these new provisions [of the Exit-Entry Law] and wheth-er refugees will receive the protection they are entitled to”.7 According to the UNHCR, which has been promoting and assisting refugee-related legislation in China, a national asylum regulation should in principle shortly follow as an implementation tool.8 Readers may be interested to know that the national refugee legislation of New Zealand was pre-sented to China as a case study in 2012. Therefore the Exit-Entry law represents a step forward in the legal protection of refugees in China, but there is still much progress to be made.

Bridge on the Sino-Myanmese border near Laiza, Kachin State, Myanmar

Lili

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22 YLC ADVOCATE

Wine and CheeseThe YLC held its annual wine and cheese evening

on 19 July. The evening was generously sponsored by both Russell McVeagh and Moore Wilsons.

During the evening two representatives from Moore Wilsons ran through a tasting on a sauvignon blanc, merlot, port and sherry. After the tasting food was set out on five different tables each representing a country, with wine and food from that country to match.

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YLC Constitution Conversation

On 24 June, the YLC held a Constitution Conversation event to promote young lawyers

making submissions to the Constitutional Advisory Panel.

Young lawyers were invited to the Thistle Inn pub in Thorndon to share their thoughts on New Zealand’s constitution, and to learn about the submission making process. There were small group discussions on each of the five areas of review: New Zealand’s constitution, the Bill of Rights, Treaty of Waitangi, Māori representation, and electoral matters. Following the small group discussions, each group reported back on the main themes that emerged from their conversations. Some excel-lent discussions and debates were had, and everyone came away with a greater understanding of different perspectives that people hold on con-stitutional issues. A big thank you to those young lawyers who volun-teered to lead the group discussions: Lizzie Chan, Jason Cooper, David Green, Anthony Wicks and Tim Cochrane.

The Constitutional Advisory Panel is an independent advisory group set up by the Government to collect, consider and report on New Zealanders’ views on a range of constitutional issues. The Panel received submis-sions up to 31 July 2013, and is now writing its report.

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24 YLC ADVOCATE

The first, United States v Windsor,1 declared s 3 of the Defense of Marriage Act 1996 (DOMA) to be unconstitutional because it defined “spouse” as applying only to heterosexual couples. The second, Hollingsworth v Perry, effectively allowed same-sex marriage in California to resume.2

These two decisions suggest that the United States is taking a more pro-gressive approach towards same-sex marriage. Both decisions uphold the spirit of the words of the United States Declaration of Independence that “all men are created equal”. However, we should be cautious in our optimism. Even though they are both decisions from the final appellate court of the United States, these decisions contain significant qualifica-tions. For example, the decisions do not guarantee that same-sex mar-riage will be recognised across all 50 states in the near future. This note explores what the Windsor decision means for the future of same-sex marriage in America.

United States v Windsor

Windsor concerned the legality of DOMA, which had barred a surviv-ing spouse from claiming a federal tax deduction (of US$363,053) on her deceased wife’s estate on the basis that both Ms Windor and her spouse were women. Although they were legally married in Canada and their marriage was recognised by the state of New York, DOMA was a federal law that defined marriage as a union between a man and woman only. DOMA applied to over a thousand federal laws and benefit programmes, denying those in same-sex marriages access to many benefits, including social security, joint health insurance and veteran benefits.

The Supreme Court ruled in favour of Ms Windsor by a 5:4 majority.3 The majority held that in enacting DOMA, Congress’ sole purpose was to hamper same-sex marriage.4 DOMA’s stated purpose was to promote an “interest in protecting the traditional moral teachings reflected in heterosexual-only marriage laws”.5 Indeed, this purpose was apparent from the very title of the statute. The majority held that DOMA’s purpose was discriminatory and violated Ms Windsor’s constitutional right of equal protection. The majority also held that DOMA effectively commu-nicated to same-sex couples that their otherwise valid marriages were unworthy of federal recognition.6 DOMA effectively made same-sex marriage a kind of “second-tier marriage”,7 contrary to the United States Constitution, which protects same-sex couples’ freedom to make their own moral and sexual choices.8

Not a complete victory for equal rights

However, despite the majority’s strong words in favour of equality, the matter was not determined on a truly rights-based analysis. The de-

United States v Windsor and the

Unconstitutionality of the Defense of Marriage Act 1996 (US): What does it actually mean for same-sex marriage

in America?

June was a monumental month for same-sex couples in the United States of America.

On 26 June 2013, the Supreme Court of the United States issued two landmark decisions on same-sex marriage that were celebrated across

the country by gay rights advocates.

Jennifer HowesB U DDL E F I N DL AY

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1 United States v Windsor 570 US ___ (2013).2 Hollingsworth v Perry 570 US ___ (2013).3 Kennedy J delivered the majority opinion of the Court, joined by Breyer, Ginsburg, Kagan

and Sotomayor JJ. Roberts CJ filed a dissenting opinion. Scalia J filed a dissenting opinion, in which Thomas J joined and which Roberts CJ joined as to Part I. Alito J filed a dissent-ing opinion, in which Thomas J joined as to Parts II and III. All four dissenting Judges believed that the case should have been rejected on standing grounds. This was because Ms Windsor had won her case at the circuit court level (Court of Appeal) and the Obama administration was no longer defending the constitutionality of DOMA. Accordingly, there was no controversy for the Supreme Court to resolve. Further, all four dissenters believed that DOMA was constitutional on the merits.

4 Windsor, above n 1, at 21.5 At 21.6 At 22–23.7 At 23.8 At 23.

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9 At 25-26. The “due process clause” is part of the Fifth Amendment to the United States Constitution, which states that “nor shall any person … be deprived of life, liberty, or prop-erty, without due process of law …”.

10 Sosna v Iowa 419 US 393 (1975) at 404; and Ohio ex rel Popovici v Agler 280 US 379 (1930) at 383–384.

11 Consider the issue of abortion, for example. Abortion is legal nationwide in the United States due to the Supreme Court of the United States’ decision in Roe v Wade 410 US 113 (1973). However, recent legislation in Texas has introduced new licensing standards and building requirements that are likely to lead to the closing of most abortion centres within the state. In contrast, California has recently taken steps to lower the requirements for obtaining an abortion and passed more permissive laws to enable medical practitioners to perform abortions.

cision turned, in large part, on the concept of federalism and the sov-ereignty of states over their own citizens. In the United States, sover-eignty remains divided between the federal Government and individual states. States have the right to govern their own people, and the federal Government can only impede on state sovereignty in limited circum-stances. Unlike in New Zealand, the United States Constitution is su-preme law, enabling the Supreme Court to strike down any statute or part of a statute that violates the Constitution. The majority held that DOMA not only frustrated the laws of New York, but “wrote inequality into the entire United States Code”. Because DOMA had no legitimate purpose that could override the state’s right to dignify and protect same-sex couples, s 3 of DOMA was held to be unconstitutional as a violation of the Constitution’s due process clause.9

Therefore, the Supreme Court’s decision can be seen as a decision based more on respect for the constitutional boundaries between the federal and state governments than on discrimination and equal rights grounds. It has been long recognised in the United States that the area of “domes-tic relations” is exclusively governed by states.10 States can legislate as they wish in regards to marriage, divorce and family arrangements (within the bounds of the Constitution). Thus under federalism, the pri-macy of state sovereignty often results in 50 different approaches to the regulation of the same subject matter.11

No fundamental right for same-sex couples to marry

The majority of the Supreme Court fell short of holding that same-sex couples have the fundamental right to marry. The majority left intact s 2 of DOMA, which provides that a state is not required to recognise same-sex marriages performed in another state. Currently, only 13 states and Washington DC recognise same-sex marriage. The federal Government is therefore not required to extend federal benefits to couples residing in states that do not recognise the federal definition of marriage. In reality, the Windsor decision only affects approximately 30 per cent of the American population (that is, the number of people living in states where same-sex marriage is permitted).

Despite the significant qualifications in the majority’s judgment, the de-cision in Windsor remains a breakthrough for gay rights advocates. There are now at least 13 states and Washington DC where same-sex couples can marry and qualify to receive federal benefits. However, there are still 37 states where same-sex couples have more restricted rights, and where the Windsor decision will have no practical effect. Many hope that the Windsor decision will be a catalyst for change, although progress in the remaining 37 states is likely to be slow. Nevertheless, the Windsor de-cision represents hope for many gay rights advocates both in the United States and across the world.

Reb

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26 YLC ADVOCATE

Another Good Day at the Office

Buddle Findlay was the very warm and generous host of a recent chat-show format panel discussion on wellness issues facing the profession. This year’s discussion was again facilitated by Rachael Dewar in a re-laxed and engaging way. The serious topics were interspersed with lib-eral amounts of good humour from a diverse and experienced panel.

Justice Kós offered the view that practice could be a bit like exams at university: it is helpful to spend much of your time thinking about the issues and a small amount of time writing it down. Richard Fowler QC expressed a “strong personal view” that it was imperative to have a per-son outside your work-place who you can go to for mentoring and ad-vice. This could be used for broader issues than immediate supervision of current files. Richard suggested that the “flip side” of this idea of hav-ing a mentor is that if you are approached you will react with the same generosity as the mentors you have benefited from. That was Richard’s “plea” to the profession — to provide support to each other. As Justice Kós put it, providing mentoring to other practitioners is a “very pleasant duty”.

Deputy Solicitor-General Una Jagose spoke of the “tyranny of the im-mediate” and how she manages the myriad of potential distractions and demands on a modern practitioner’s time, whether from phone calls, texts or emails. She shared insights on building some time for herself into her busy professional schedule. Una also identified the need when supervising other lawyers to use good communication well in advance of deadlines, set clear expectations, and check in regularly with the per-son doing the work.

Commercial lawyer Josh Blackmore believes it is more and more unacceptable to be supervising someone in a way that causes them dis-tress. He spoke about the use of 360 degree feedback in his firm and about his view that this acts as a check on what might be regarded as bullying behaviour.

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Aaron MartinDI R EC TOR OF P RO C E E DI NG S,

W E L L I NG TON OF F IC E OF T H E H E A LT H

A N D DI SA B I L I T Y C OM M I S S ION E R

The “Another Good Day at the Office!” event was held on 18 July and followed on from last year’s

successful “A Good Day at the Office?”, which was hosted by Minter Ellison.

A highlight of the evening for many people was the experience and knowledge of therapist and counselling professional Jayne Webley. Jayne warned lawyers about the possibility of coming into contact with people who display narcissistic or “borderline” traits. She provided some useful practical advice into charming and manipulative individu-als we may come across, and warned that not everyone has the same values. Lawyers need to be alert to professional boundaries, “hold your own”, and “be alert” to temptations that might arise for you and to the dangers of other people exploiting your vulnerabilities, whether finan-cial or personal.

All in all, it was a fabulous evening at Buddle Findlay. I am very grate-ful to the organising committee: Rachael Dewar, Cathy Blakely, Jamie Grant, Ruth Nicholls, Natalie Pierce and Cathy Rodgers. Special thanks goes to the excellent panel for giving their time so freely to share their valuable insights. Buddle Findlay made the whole evening possible and extremely convivial with their generous hospitality.

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MootingCompetition2013

A rewarding and challenging opportunity to practise the craft of advocacy, to develop familiarity in the court room, and to get training and mentorship from New Zealand’s top barristers

Open to current and past professional legal studies trainees who are not yet admitted, and lawyers with up to 5 years’ PQE. Participants enter as teams of two

New Zealand Bar Association/YLC

September–October 2013, Wellington

Visit www.younglawyers.co.nz for further details and a registration form. Registrations due by 26 August 2013. Registration is free.

Contact ylcmooting@gmail.com with any questions.

With thanks to Bell Gully for its assistance with the drafting of the Competition rules and marking guide.

The Young Lawyers’ Committee and New Zealand Bar Association present:

28 YLC ADVOCATE

Case note on s 9 of the Fair Trading Act 1986:

Poplawski v Pryde

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Nick MereuC A S E M A N AG E R AT F I N A NC I A L

S E RV IC E S C OM P L A I N T S LT D

Section 9 of the Fair Trading Act 1986 appears straightforward: “no person shall, in trade, engage

in conduct that is misleading or deceptive or is likely to mislead or deceive”, but plenty of judicial

and academic ink has been spilt determining what approach to take in particular cases.1 This article sets out the respective approaches taken to the

interpretation of s 9 by the High Court and Court of Appeal in Poplawski v Pryde.2

The facts

Pop and his son, Stefan, wanted to buy a helicopter from Mr Thow. Stefan worked as a pilot for Mr Thow’s company, Alpine Helicopters. Mr Thow had agreed to purchase the assets of another helicopter company, South West, and had established a new company to own both Alpine and South West’s assets. Mr Thow needed finance to settle his sale and pur-chase agreement with South West before he could sell Pop and Stefan a helicopter.

Pop lent Mr Thow $350,000 to this end. In exchange, Pop took a 50 per cent share of Mr Thow’s new company. Pop’s $350,000 went to South West, but Mr Thow failed to arrange the remaining finance to settle his agreement with South West. South West cancelled the agreement with Mr Thow and retained Pop’s $350,000. Mr Thow was bankrupted, and Pop’s 50 per cent share in Mr Thow’s new company was worthless.

The alleged misleading conduct

Mr Pryde was South West’s lawyer. After a visit from Mr Thow, Mr Pryde sent an email to Stefan and Stefan’s lawyer. That email gave the impres-sion that the sale and purchase agreement between Mr Thow and South West could be reasonably expected to proceed. In fact, the transaction was highly unlikely to succeed at the time the email was sent: Mr Thow had only 7 days from the date of the email to arrange an extra $1.5 million to finance the agreement. Mr Thow had also repeatedly breached and failed to settle his agreements with South West.

Pop sued Mr Pryde for $350,000, arguing he had been misled under s 9 of the Fair Trading Act.

Two approaches to s 9: Heaven and Red Eagle

In the High Court, counsel for Pop argued that the Red Eagle3 approach to s 9 should be taken. Counsel for Mr Pryde argued for the approach in Heaven.4

Heaven had set out a three-step approach that had become the “locus classicus”5 for determining whether conduct was misleading under s 9 until Red Eagle was decided over a decade later. Heaven asks:6

1. Is the conduct capable of being misleading?2. Was the claimant in fact misled? 3. Was it reasonable for the claimant to have been misled?

In Red Eagle, the Supreme Court did not overturn Heaven. However, it commented that a prescriptive methodology for s 9 was not appropriate for all cases, and that the approach to be taken in a particular case should depend on the type of situation under scrutiny.7 The Court established a different test, which was to be applied in relatively simple cases where there was no doubt about what was said or about its meaning and where all of the alleged loss arose from the same event.8 The Red Eagle test in-volved two steps:

1. Would a reasonable person in the claimant’s position likely have been misled (s 9 of the Fair Trading Act)?9

2. If so, was the breach an effective cause of the claimant’s loss in de-termining the appropriate remedy under s 43 of the Fair Trading Act?

1 See, most recently, Matthew Barber “Red Eagle Corporation Ltd v Ellis: Fair Trading, Reasonableness and Commercial Transactions” (2010) 16 NZBLQ 356; Lindsay Trotman and Debra Wilson “Stairway from Heaven: s 9 FTA” [2010] NZLJ 310; and Christopher Walshaw “Red Eagle and reasonableness” [2011] NZLJ 144 and cases cited therein.

2 Poplawski v Pryde [2012] NZHC 2011 [Poplawski (HC)], rev’d [2013] NZCA 229 [Poplawski (CA)].

3 Red Eagle Corp Ltd v Ellis [2010] NZSC 20, [2010] 2 NZLR 492.4 AMP Finance NZ Ltd v Heaven (1997) 8 TCLR 144 (CA).5 Trotman and Wilson, above n 1.6 Heaven, above n 4, at 152.7 Red Eagle, above n 3, at [26].8 Red Eagle, above n 3, at [27].9 Red Eagle, above n 3, at [28]. The Supreme Court stated that “if the conduct objectively had

the capacity to mislead or deceive the hypothetical reasonable person, there has been a breach of s 9”.

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10 Poplawski (HC), above n 2, at [47].11 Poplawski (HC), above n 2, at [57].

12 See Red Eagle, above n 3, at [65]13 Poplawski (CA), above n 2, at [50]-[63].14 Poplawski (CA), above n 2, at [72].15 See articles cited, above n 1.

The High Court

Whata J cited Red Eagle to say there was no fixed route to approaching s 9, and then set out a “nuanced approach”, asking:10

1. Was Mr Pryde’s email capable of being misleading? 2. If so, would a reasonable person in Pop’s position have been likely to have been misled?

Whata J found that the email was capable of being misleading as it con-tained a number of half-truths and omissions when a reasonable person in Pop’s position could have expected accuracy.

However, Whata J reasoned that the misleading aspects of the email were “offset” by other information available to Pop. This information included, for example, the fact that Stefan’s lawyer had warned against making hasty purchases without adequate security, and the fact Pop knew that Mr Thow had “borrowed to the hilt”, had not arranged finance for the purchase, and was possibly “not of substance”.11 A reasonable person in Pop’s shoes should not, therefore, have been misled.

Whata J concluded that if he had found an actionable breach of s 9, he would have reduced Pop’s award to half of his losses. Although Whata J accepted the email was causative of Pop’s loss, he would have made a re-duction from the full amount of the loss in order to reflect Pop’s careless-ness, the limited role played by Mr Pryde, and the indirect relationship between Pop and Mr Pryde.12

The Court of Appeal

The Court of Appeal held:13

• The approach in Red Eagle, which had similar features to the pre-sent case, should have been followed.

• An actionable breach of s 9 was made out when Whata J found that Mr Pryde’s email was capable of being misleading on the basis that a reasonable person would have expected an accurate email.

• Subsequent questions about whether Pop took reasonable care to safeguard his own interests after receiving the email should have been considered separately in the assessment of causation and damages under s 43.

Having found an actionable breach of s 9, the Court “saw no reason to interfere” with Whata J’s finding that Pop’s award should be reduced by half.14 The Court ordered Mr Pryde to pay Pop $175,000.

Comment

Debate about the continuing relevance of the three-step test in Heaven will no doubt continue. Considered narrowly, Poplawski v Pryde simply reinforces Red Eagle. Considered broadly, the Heaven approach may fall by the wayside. Commentators have been rather critical of it.15 Red Eagle is a cleaner take on s 9, and cases that are outside of Red Eagle’s self-de-fined scope, that is, cases where there is no doubt about what was said or about its meaning and where all of the loss arose from the same event, should be few and far between.

Red Eagle approach leaves Heaven behind

30 YLC ADVOCATE

You have a day job life, in Hamilton?

Yes, that’s right. I sit in the District Court, with a jury and general war-rant, so that’s my day job. But then, once a year in the middle of the Waikato winter, I go off to Umbria and teach a course on “Art Crime During War”.

How did this happen? It seems so far away from “the Tron”?

There is a bit of a story about how this came about. I was at a forensic DNA conference at Interpol, in France, and I got talking to a guy from Interpol’s stolen art unit. It turns out that a few of the legal issues re-lating to the use of forensic DNA in international cases also have some have relevance to stolen art: art is often stolen in one country, and passes through two or three jurisdictions over a period of time, before re-sur-facing in a country with a markedly different legal system.

On the internet, I found an announcement for a conference in Madrid to celebrate the return of some maps which had been stolen from the Spanish National Library. I got in touch with the organiser of this con-ference, Noah Charney, and suggested I give a paper about cross-border legal issues regarding stolen art. That didn’t happen, but I ended up writing a chapter for his book, Art and Crime: Exploring the Dark Side of the Art World.1 Later, Noah invited me to go to Italy and present a paper at ARCA’s inaugural art crime conference. He then invited me to teach a course there.

Art crime during war seems like it is something that not everyone knows about?

There has been a fairly strong interest in art crime during war, and its consequences, since the Second World War. At the end of the war, there was a very substantial effort by the Allies to return a lot of the art stolen by the Nazis. Nobody really knows for sure, but probably about 60 per cent of the stolen art was returned to its country of origin. The rest was lost, or is not traceable, or turns up years and generations later, often in a different country. Interest in the continued investigation of the miss-ing art works dropped off the radar at about the beginning of the 1960s for three or four decades. There was still a lot of interest by the heirs of the dispossessed, the people who had art work stolen. But in terms of a wider profile, it dropped off.

Then, in the early 1990s, there was an upturn in interest – there was a book published called the Rape of Europa by Lynn H Nicholas2 and a series of fairly high profile conferences. This culminated in the Washington Declaration (the Washington Conference Principles on Nazi-Confiscated Art, 1998) in the later 1990s, which established guid-ing principles for the restitution of looted art.

It’s also at this stage you start seeing private claims for the return of looted art from musuems and public institutions?

Yes, part of that was the development in the United States’ courts of a jurisdiction over looted art, on the basis that the institutions exhibiting it did business in the United States. There were a series of high profile cas-es: one involved Gustav Klimt’s Portrait of Adele Bloch-Bauer which was,

Da Vinci who?

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Interview with Judge Arthur Tompkins, as told to Lucy Revill, law clerk at Minter Ellison

Rudd Watts and art enthusiast

It’s not every day that a member of the New Zealand legal profession gets his work quoted in a book written by one of the world’s most famous living authors. But then again, Judge Arthur Tompkins is not your usual Judge. Each Italian summer (our southern hemisphere winter), he sets aside his day job as a judge at the District Court in Hamilton to lecture at the Association of Research into Crimes Against Art (ARCA) in the small town of Amelia, in Umbria.

Judge Tompkins recently made international headlines when The Da Vinci Code’s author, Dan Brown, used a passage from Tompkins’ writing in his latest New York Times bestseller, Inferno. Brown’s hero, Professor Robert Langdon investigates part of the long history of the Horses of the Basilica San Marco, in Venice. Langdon, in the scene in the book, refers to an article written by Judge Tompkins and published by ARCA on its website.

Advocate was lucky enough to interview Judge Tompkins.

3 Noah Charney (ed) Art and Crime: Exploring the Dark Side of the Art World (Praeger, United States, 2009).

4 Lynn H Nicholas The Rape of Europa: the Fate of Europe’s Treasures in the Third Reich and the Second World War (Vintage Books, United States, 1994).Judge Arthur Tompkins

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and remained, in Austria. That case went to the United States Supreme Court, but was then resolved by arbitration in Austria. That case, and others cemented New York as a place where these sorts of disputes could be and would be litigated.

The thing is, looted artworks from the Second World War keep re-ap-pearing. There was a huge amount of modern art stolen by the Nazis, and the owner’s descendants often spend generations trying to get it back. Right now, a Norwegian gallery is in possession of a Matisse (Blue Dress in A Yellow Armchair, 1937) once owned by Paul Rosenberg, a modern art dealer in Paris between the wars, and stolen by Goering. Rosenberg’s descendants want it back. That’s going to be difficult to resolve because although the provenance is fairly well-established, Norwegian law says that if you buy something in good faith and you have it for 10 or more years then you have good title. That is a stark illustration in the difficulty of resolving these claims.

So, what about the issue of immunity from seizure legislation?

The Ministry of Culture and Heritage in New Zealand is considering this issue now, as are a lot of other countries. The argument is that countries should consider passing legislation protecting works of art from seizure within the country when the artwork is temporarily in that country for an exhibition. If there is a claim arising from an earlier theft then (for example) the heirs may seek from a local court an order seizing the artwork until the claim is resolved. Immunity from seizure legislation stops this from happening. But immunity from seizure is not an easy is-sue. Balancing the ability of the original owner to claim back the art-work against the community’s interest in encouraging the public display and movement of artworks, especially when the provenance is murky or obscured, is sometimes not a simple thing. The New York experience has undoubtedly has had a cooling effect on loans for exhibitions right around the world. For example, no artwork will come out of Russia at all on loan unless there is immunity from seizure legislation in the country where it is going.

Another case involved Portrait of Wally, by Austrian painter Egon Schiele. It was owned by a Jewish gallery owner. but was stolen by the Nazis. After the war is ended up in the Leopold Gallery in Austria. It was lent to the Museum of Modern Art in New York, and whilst there a claim was launched and the painting seized. It ended up languishing in a ware-house in Queens for ten years, until the litigation settled.

How are these issues impacting on public institutions around the world?

There is an increasing recognition that buyers, especially major public institutions, have an obligation to do due diligence on the provenance of the items they have in their collections or are interested in buying. Up until 10 to 15 years ago much of the art market tended to operate on a “don’t tell, I don’t want to know” basis. Provenance was simply not discussed. This has changed. Public institutions and investment buyers are aware of the fact that they are probably buying into a fight if they do not check this out. Twenty to 30 years ago, there would have been no is-sue about war-time gaps in the provenance. Now, people want to know. There is certainly an awareness that provenance needs to be taken more seriously.

Is there art crime in New Zealand?

Yes, although we don’t have anything like the amount of the Nazi looted art in Europe showing up in New Zealand. But, there almost certainly will be some art in New Zealand that was taken by servicemen and brought home. We have had our fair share of fakes, forgeries and the occasional high profile theft. Take, for example, Colin McCahon’s Uruwera Mural (valued in 1995 for NZ$1,200,000.00) that was taken from the Uruweras in 1997, or Tissot’s Back on Top, stolen from the Auckland Art Gallery and badly damaged before being recovered. A piece of art of whatever kind is unique – it is not something that can simply be replaced.

Portrait of Wally: a 1912 oil painting by Austrian painter Egon Schiele of Valerie “Wally” Neuzil, a woman he met in 1911 when she was 17 years old

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