Skycity gets compensation but we all pay the cost

The agreement between the Government and SkyCity for the build of an international convention centre is a deeply dodgy deal.

I’m launching a campaign called Gambling Laws – Not For Sale at which has an online petition and a hard-copy petition asking the Government to oppose any legislation to relax the existing gambling laws and  calls for a proper inquiry into the economic benefits and social harm costs of the deal.

The convention centre deal includes an extension to the casino’s licence for 35 years, allows for an additional 230 pokie machines and extra gambling tables and,  worryingly, allows a law change to enable cashless gambling with a Ticket In Ticket Out system which is a favourite of international money launderers.

The agreement also contains a compensation clause that binds future governments to compensating SkyCity if they change the law to reduce gambling harm and it affects the casino’s profits.

This week we held a successful community leaders forum where we invited organisations that deal with the social harm of gambling to comment about the deal. We were hosted by the Reverand Dr Lynne Frith at the Pitt Street Methodist church and other speakers included Major Campbell Roberts from the social policy unit of the Salvation Army; Reverend Mua Strickland-Pua a Presbytarian minister and city youth worker, Ants Hawke of Ngāti Whātua from Hapai Te Hau Ora, Councillor Richard Northey giving an overview of the law and Green party member and former member of the government’s Expert Advisory Committee on Gambling. All were united in their message that the casino deal is a dirty deal and should not proceed.

The compensation aspect of the deal is a worrying one.  SkyCity have done very well in their share prices as a result of the announcement. SkyCity also want to trap future governments into compensating SkyCity if the Greens change the law to minimise gambling harm.  I consider SkyCity’s claims to be unfair and I’d hazard unconstitutional.

Gambling is already predicted to increase so SkyCity will no doubt be making profits without the convention centre deal.

However I doubt that the three year gambling strategy, that is funded by the gambling levy placed on all modes of gambling, has factored in the increased harm of the casino’s proposed extra 230 pokies.

The convention centre is not a free deal.  We will all cover the costs of social harm through our taxes while the shareholders in the casino take their profits offshore.

 

54 thoughts on “Skycity gets compensation but we all pay the cost

  1. There is less money spent on pokies now than there was 8 years ago, and the even allowing for the increase at Sky City, total numbers of pokie machines will continue to drop.

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  2. The agreement also contains a compensation clause that binds future governments to compensating SkyCity if they change the law to reduce gambling harm and it affects the casino’s profits.

    I wouldn’t worry to much about this. This clause isn’t worth the paper it’s written on as Parliament can change the law at will.

    The fact that the current lot thinks that they can legally restrain a future Parliament is both (i) an indication of their lack of understanding of the primacy of Parliament and (ii) SkyCity’s stupidity if they think the current government’s act have a shred of legality in this area.

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  3. Robert Reich wrote in Global Capital and the Nation State : “The fact is, global corporations have no allegiance to any country; their only objective is to make as much money as possible — and play off one country against another to keep their taxes down and subsidies up, thereby shifting more of the tax burden to ordinary people whose wages are already shrinking because companies are playing workers off against each other.”

    Not only Sky City but also Warner Bros. Rio Tinto and I am sure others that have slipped in under cover….Deep Sea Oil Drilling ? before they packed up and went home and we are left with Simon Bridges Police State law change denying us the right to protest guaranteed in the Bill of Rights. I hope Gregorw is right but with a Constitutional Review in progress I don’t trust Key – he’s a corporate shill.

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  4. It depends if the clawback clause is something in the legislation, in which case it can be unwound at any time by further legislation, or it is a contractual term.

    If the term ends up in a contract between the Crown and Sky City, then it’s here to stay, as no government is going to willy-nilly decide that contracts can just be torn up when it doesn’t suit one side. No court would allow that to happen.

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  5. And someone downticks PhotoNZ on a fact. On an opinion, yeah, sure, but on a rock solid fact, about which there is no room whatsoever for debate, unbelievable. This can’t be any of the regulars, they are all far too intelligent to do something that dull…

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  6. dbuckley @4.19 pm
    The Green party, in the form of Russel Norman and Materia Turei have already said that they will terminate the contract with no reparations payable. I also think they won’t be able to because they will always be a wagging tail on a large Labour mongrel dog.
    I have a friend who is a member of the Green party. He appears to believe that they can, and will, override the contract. He is a retired civil servant. I have pointed out to him that Green policy is to tax all income equally and as a consequence of that his now tax-free pension will become taxable. He tells me that “They can’t do that, I’ve got a contract.” I of course point out that the Green party don’t see anything sacrosant about contracts.

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  7. “There is less money spent on pokies now than there was 8 years ago”

    So therefore it’s OK to try and reverse this trend?

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  8. Alwyn – you might want to point out to your ‘friend’ that no political party in NZ takes contract as sacrosanct when it is against their political interest. The only test is the Courts.

    But I’m guessing you won’t.

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  9. Sam says “So therefore it’s OK to try and reverse this trend?”

    If you can read, try finishing the rest of my sentence, which said

    “…and the even allowing for the increase at Sky City, total numbers of pokie machines will continue to drop.”

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  10. but photo, you know not what other deals shonkey might line up. Now that the law is so clearly for sale where will it end?

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  11. dbuckley – if the present government signs a contract that constrains future government from passing legislation, it holds no water. It is a rule of thumb under parliamentary primacy that a government may simply legislate away a contract.

    The Courts actually have no say in the matter if Parliament really wants it to happen, as they cannot challenge the legitimacy of a law. The problem with having no ossified constitution.

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  12. “No court would allow that to happen”.

    Governments override contracts all the time.

    The Employment contracts act, for example, tore up years of negotiated contracts.

    Ask US state civil servants about the pension part of their employment contracts?

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  13. Apparently if you read the comments above, these days, Governments are fine breaking contracts with, or between, ordinary citizens, but contracts with corporates are sacrosanct.

    What happened to the constitutional convention that no Parliament can bind a future one?

    A convention RWNJ’s try and subvert whenever they have power. TPP anyone!

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  14. alwyn 5:29 PM

    The Green party, in the form of Russel Norman and Materia Turei …

    Oh,FFS, at least you could spell Metiria’s name correctly.

    Wag your own tail!

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  15. Actually I am trying to imagine any actual member of this party making that sort of statement… and failing. There is a “made up” quality to it that beggars belief. As if any of us reckon we have a “contract” with government to not be taxed?

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  16. Actually quite like the notion of a government having the power to legislate previously entered into contracts.

    Sometime in the future we will have a government with big enough kahunas to nullify the treaty of waitangi and free up ALL New Zealanders from the yoke of colonialism angst and the perpetually patronizing of Maori to be lower ranked citizens than the rest.

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  17. DBuckly.

    Photo-Facts or Photo stats are noted for not telling the full story.

    A dishonest debating tactic, often called, “cherry picking”.

    For example his habit of quoting proportions of the population who pay income tax, to try and pretend the rich pay a disproportionate amount of tax. He will never give us the proportions who pay the TOTAL tax take, because that would detract from his story.

    If you dig deeper his “FACTS” you will usually find he has not told you the full story. hence the down-ticks above. Not from me this time by the way!

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  18. It is funny those who are claiming “the sky is falling” if a future Green Government changes the terms of this contract. As if it is only Greens that change contract terms.
    How many actual and implied contracts have National broken in 4 years?

    Governments change the terms of existing contracts all the time.
    Existing Teaching bond terms have been changed at least a six times, unilaterally, by the Government in the last 5 years, to name just one.

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  19. And. Gerrit. Any Government has the power to tear up the treaty.

    Many successive Governments ignored it.

    Whether they should, is another matter.

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  20. Treaties are one of the contracts Governments routinely break.

    What is the average time before a war starts, after a peace treaty??

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  21. What is the average time before a war starts, after a peace treaty??

    War has already started with the military “training” being uncovered in the Urewaras.

    Urban and rural military training is already underway at numerous commercial training “facilities” in Auckland.

    Both sides are already gearing up so we wont even need to have the contract from two centuries ago nullified.

    Is the contract called the treaty of waitangi really a peace treaty?

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  22. Gerrit – The notion that National can succeed in this is wrong. It CANNOT actually do what it asserts. Moreover, the attempt is as morally repugnant as almost any of their actions to date have been.

    “Can one generation bind another and all others in succession forever? I think not. The Creator has made the earth for the living, not the dead. Rights and powers can only belong to persons, not to things, not to mere matter unendowed with will.” –Thomas Jefferson to John Cartwright, 1824. ME 16:48

    National is a government of the wealthy, by the wealthy and for the wealthy, and not even limited to the wealthy of THIS nation. It is a treasonous, poisonous government owned by bankers with a banker at its head. It is an incompetent gaggle of thieves the contemplation of whom causes the gorge to rise, and the mind to darken.

    …and our compatriots elected them.

    Darwinian competition is NOT the proper basis for a society unless you care not for morality and justice.

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  23. toad @ 9.41pm.
    I do apologise to the co-leader of the Green party for misspelling her name. Have you never made a typo in your life?

    bjchip @ 10.52pm
    You may be referring to my quote about the non-taxation of Super. I understand that the Government superannuation was reorganised in the 1980’s and contributors were given the option of having their contributions taxed and having the Super taxfree or not having the contributions taxed but having their Super taxed. This was the contract he is talking about. Not having been a Public Servant I don’t know the full details but I am sure someone who was can confirm, (or correct) this.

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  24. Next election will you be prepared to work alongside mana party n other independents, have you the numbers of candidates in all electorates to fend off national n labour n act n nz first n maori party.
    Iam prepared to operate a campaign to get rid of these parties as they are all willing to destroy the NZ ENVIRONMENT that we have fought for in the past by deep sea oil drilling n mining the resources.

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  25. ACC is another Government breach of contract.

    Where contributions we made for accident compensation are being used for an unnecessary surplus, while payouts and support for accident victims are reduced. Of course that was to fatten it up for sale, but even National had to admit that private companies could not provide the same cover cheaper.

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  26. Kerry:

    DBuckly.

    Photo-Facts or Photo stats are noted for not telling the full story.

    A dishonest debating tactic, often called, “cherry picking”

    Well, as I noted, absolutely bang on the money in this case.

    As eidence I present a link to a 150K PDF, a graph of gaming machine numbers 1994-today from the DIA, who are, in this respect, the horses mouth. It speaks for itself.

    Based on the machine numbers in Class IV establishments (which I know that Sky City pokies aren’t), and taking the nunmbers up to the submissions on the Gambline Ammendment bill, an extra 230 pokies would reverse the drop for… one entire quarter, after which the numbers would again be downwards. On average 150 pokie machines dissapear per quarter. Another 230 pokie machines, in that context, isn’t a big number.

    Thats the reality of the numbers.

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  27. Gregow W:

    dbuckley – if the present government signs a contract that constrains future government from passing legislation, it holds no water. It is a rule of thumb under parliamentary primacy that a government may simply legislate away a contract.

    I think you’ve misunderstood, which is another way of saying I’ve not explained myself clearly.

    What I think will happen is that this clawback nonesense wont be any significant part of any legislation, other than that is where it will be introduced. Legislation can, as already noted, be changed by future legislation, so having such a term in legislation makes it fragile, and susceptible to a future government simply wiping it away.

    What I think will happen is that Sky City and the Government will sign a contact, and this will (like all contracts) be a binding contractual document, and it will contain the clawback term. Something along the lines of “If The Crown changes the law so as to blah blah blah then the Crown will recompense Sky City blah blah blah”.

    Now although it is JK’s government writing and signing the contract, the party of interest here to the contract is The Crown, and thus this contract binds the Crown.

    It is one thing for the government of the day to vary contracts to which it is not a signatory. However, the Crown simply saying “we’re changing a contract that we are one party of, and not in line with the terms contained therein” is a very different matter indeed. That would be seen not as a legitimate variation of contract, but as one side (The Crown) failing to honour its obligations under the contract, and then under centuries old English common law, Sky City would go to court and demand damages for breach of contract. How could Sky City fail to prevail.

    I don’t think it would get as far as the courts; I suspect that Her Maj’s people will pick up the phone and point out that it is Her name on the contract, and what the hell do they think they are doing dragging Her Maj through the courts. They will point out if this contract can be voided by government action, then every contract ever entered into in the name of Her Maj is also is danger of being ripped up.

    Thus although a legislative device preventing future action is clearly a non-starter, a contractual device is a distinct possibility.

    In a similar way, the Treaty is no more than a contract, signed by The Crown. If it turns out The Crown can indeed lawfully just walk away from its obligations under a contract, then the Treaty is, to quote a phrase, “gone by lunchtime”.

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  28. Oops – missed the first bit on PhotoNZ’s post about the amount of money through pokies, for Class IV, that also is absolutely true and also not subject to wiggle room.

    Yes, the funds available to good community causes continues to drop, $4m less in the last year without adjusting for inflation.

    Not really a Sky City issue, I know, but disappointing nevertheless.

    It was only last week that Holly was asking How do we create a real golden age in the arts in NZ? Pokie funding is clearly reducing, and there is no replacement funding coming from elsewhere…

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  29. dbuckley – You have a point about the way the LAW may view this.

    If it were a contract to commit suicide the contract law would still apply? This is a contract to damage our society and that parallel is quite clear.

    Moreover, the notion of limiting future government’s ability to govern through contract law is a cornerstone of the continuing effort of business to take over governments.

    Future governments are NOT limited by the contracts of the current government. They honor them where sensible and by and large they are not so insanely repugnant to the good of the nation that there is any reason to alter them, but make NO mistake, government is for the living. The government has the right to legislate and the contract be damned.

    The immorality of even considering putting such a clause into the contract has to be considered and if such a thing is included and your objections should hold the slightest weight the MONEY should come out of John Key and Bill English personally for having put the government into such a false position.

    The dishonesty with which they are dealing with the country of New Zealand is abhorrent and their personal fortunes need to stand at risk for such actions. Adding penalty clauses to contracts to prevent future governments from restricting the pokie machines that damage the social fabric of New Zealand is immoral. It is a clear sign that Key and English and the rest of National are unconcerned with the good of the country.

    Poisonous, treasonous actions are not unfortunately, something new to their government.

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  30. the Treaty is no more than a contract, signed by The Crown

    No.

    The Treaty is an agreement between multiple societies which agreed to a rather complex merger. The populations involved are still identifiable and different enough to require that treaty, and were it to be declared null it would be morally and ethically necessary to replace it with some rearrangement of GOVERNMENT or another treaty, negotiated from the same basis of equality as it was. This has nothing to do with contract law, but is expected by the United Nations.

    Confusing government with a business entity is does not serve us well.

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  31. BJ,

    You sure you are arguing from the same song sheet as the Greens?

    Greens want to nullify crown contracts (think charter schools, sky casino deal, etc) so what is your position?

    If the Greens can nullify crown contracts why cannot a future government (of any persuasion) nullify the patronising treaty of waitangi?

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  32. Illegal contracts act.
    Any terms of a contract which violate the law are rendered void and no claims may be made in enforcement of an illegal contract.

    Illegal. Any violation of common law except when the common law is overridden by statute. Any law made by a duly constituted session of parliament. A Statute.

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  33. Gerrit. The only thing stopping National abrogating the treaty now, if they wished, is the fact that they are dependent on support from the Maori party and the Maori moneyocracy..

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  34. BJ, I believe you are way off base on this one.

    Future governments are NOT limited by the contracts of the current government. They honor them where sensible and by and large they are not so insanely repugnant to the good of the nation that there is any reason to alter them, but make NO mistake, government is for the living. The government has the right to legislate and the contract be damned.

    You appear to be confusing “the right to legislate”, and “a contract”.

    I’ve explained the implications of a Contract between the The Crown and a third party as clearly as is reasonable practicable, yet you persist in an unreasonable belief. I think we’ve come to an impasse.

    At the end of the day, this arrangement whereby Sky City build a convention centre and the government coffers do not contrbute, in exchange for them getting a few more pokies (enough for a one quarter blip on the graph), this is a rather ordinary commercial deal which will be bounded by a commercial contract.

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  35. Not confusing. The right to legislate is NOT something that a contract has any business including in its terms. Including it is immoral. Nor is legislation to be used to define a contract.

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  36. The right to legislate is NOT something that a contract has any business including in its terms

    I think what you mean there is that a contract should not include terms that seek to avoid the effects of future legislation. Yep, thats a valid and reasonable opinion.

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  37. Dbuckley – my statement earlier re govt being able to legislate away an onerous contract is a truism, not an interpretation.

    There is no distinction in law between a contract with ‘the Crown’ and the government of the day. ‘The Crown’ is a fairly abstract legal concept and is not bound for any term by a contract signed by any given Minister on any given day.

    The primacy if parliament means just that. An interpretation may be challenged via the Courts and damages sought, but ultimately the govt is within its constitutional rights to legislate away hinderences without remedy, commercial or implied contract notwithstanding.

    See the Foreshore and Seabed Act 2004.

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  38. I had to go back and read some law again on this one.

    Governments can and do, enact legislation affecting commercial contracts at will. Including contracts between Government and private parties.

    Compensation from the Government, for changes to any contract which adversely affects one or both parties, is not something any New Zealand Government, or court has allowed. (Until now) Imagine the floodgates of compensation cases, if we could sue Government every time we are adversely affected commercially by a law change.
    Imagine if Government would not be able to do anything which changes commercial contracts, because the costs would be too great..

    One of the aims of the TPP, unfortunately.

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  39. Correction.

    Compensation by Government for changes of a contract made mandatory by changes in the law, which…………..

    Bloody impatient text editor.

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  40. People should need a licence to gamble, no licence no chips\tokens.

    Criteria

    – certain level of income
    – no current bad credit or debt
    – existing loans \ debts analysed

    Licence to be renewed every 3 months.

    System to be fully funded by the establishments that supply the means to gamble by way of annual fees based on previous years income.

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  41. My preference would be that people do not make their living off the misery of others.
    taking advantage of peoples need for hope.
    Gambling, drugs, loan sharking, derivatives trading.

    However that will mean a big change to our present social mores.

    A license to gamble is not a bad idea to reduce some of the harm.

    Legalizing bad behavior, then taxing the shit out of it, is often rather effective in reducing the harm.

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  42. “Legalizing bad behavior, then taxing the shit out of it, is often rather effective in reducing the harm.”

    :) Loving this :)

    Although….its a balance..taxing it to much just forces it to go underground and thus becomes illegal again.

    People will only tolerate so much.

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  43. Gregor and Kerry, as I’ve said oodles of times, the government can change any legislation it likes. It can change other peoples contracts willy nilly. But I do not believe it can change a contract to which it (or actually, The Crown) is a party (outside of the changes allowed by the contract, of course) without that being a breach.

    If it can, then every contract with the Crown is not worth the paper it is written on, because, in effect, it isn’t a contract, as there is no “binding” involved.

    If you have a specific example, I’d like to see it. Always willing to eat humble pie when I’m wrong.

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  44. nzmr2guy’s comment is not without merit, of sorts:

    People should need a licence to gamble, no licence no chips\tokens.

    I see it the other way up, responsible adults can do pretty much what they like. The problem is problem gambers, not problem adults generally, or problem pokies or problem venues.

    So whats the solution:

    Easy. A change in the law, which Denise could sponser as a private members bill. When a person is identified as a problem gambler (ie one who is creating harm to others through gambling) then an application to the court can be made, to have this person formally identified as a problem gambler. I anticipate there would be a regular review perocess, and maybe this could be best handled through the family court system.

    Problem gamblers would be fitted with their choice of RFID tag, either a wristband, an ankle band, or even implanted if they desire. This isn’t a hunky great tag like crims on Home D wear, a thin band, but irremovable without the use of scissors or other sharp tool.

    All gambling venues would require to be fitted with a RFID sensor at the entrance to the gambling area, and this would alert bar stff to the presence of a problem gambler, requiring monitoring. That data would also be collected by the DIA though the exisiting gambling comms network, and thence forwarded onto the Court for their review.

    There you go; problem solved.

    Should TITO be introduced widely (a damned good idea in its own right, ask any auditor) then by placing a RFD reader on the TITO machine then an actual audit trail of how much they staked, along with a full trail of exactly how they gambled (another benefit of TITO) can be obtained.

    Of course, if a problem gamber were to remove their tag and subsequently be caught gambling, then perhaps they do need some Home D, and the courts would be well placed to make that happen.

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  45. <iIf you have a specific example, I’d like to see it. Always willing to eat humble pie when I’m wrong.

    As provided a above The Foreshore and Seabed Act 2004 which specifically negated implied property rights – a contract.

    I have already stated specifically why ‘the Crown’ is perfectly legally entitled entitled to do this

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  46. “If you have a specific example, I’d like to see it”.

    My own contract with the Government when I did Teacher training.

    They have unilaterally changed the terms several times since I signed it.

    Mostly, I can say, to my advantage, but the same changes could have been detrimental to someone in slightly different circumstances.

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  47. The Foreshore and Seabed Act 2004 which specifically negated implied property rights – a contract.

    You’re guys not getting it are you. I don’t want a bland statement; I want something specific.

    The Foreshore and Seabed Act 2004 is 74 pages long. Tell me where exactly it overrides an existing contract, where the Crown is one party to that contract, and bearing in mind section 29. If applicable, then show me what contact it has overridden, so I can examine that too. I’m quite happy to wade through 74 pages (and a lot more) once I know exactly what context I am dealing with, but I’m not going on a fishing trip.

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  48. …The second

    The Queen of England agrees to protect the chiefs, the subtribes and all the people of New Zealand in the unqualified exercise7 of their chieftainship over their lands, villages and all their treasures.8

    7. ‘Unqualified exercise’ of the chieftainship – would emphasise to a chief the Queen’s intention to give them complete control according to their customs. ‘Tino’ has the connotation of ‘quintessential’.↑

    8. ‘Treasures’: ‘taonga’. As submissions to the Waitangi Tribunal concerning the Māori language have made clear, ‘taonga’ refers to all dimensions of a tribal group’s estate, material and non-material – heirlooms and wahi tapu (sacred places), ancestral lore and whakapapa (genealogies), etc.

    http://www.waitangi-tribunal.govt.nz/treaty/kawharutranslation.asp

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  49. Note also that some Maori groups did have Common Law rights to some foreshore areas which would exist (had they not been extinguished) irrespective of The Treaty due to their continual use. This is also essentially a breach of contract.

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  50. I’ve made a big mistake here, taking on a piece of legislation that was mired in a decade of controversy; Let the dead dog lie in peace.

    Having wasted an hour reading the F&S act, it does seem that this piece of legislation does indeed attempt to override a contract in the form of the Treaty. However it is also quite clear that it does not try to eliminate the possibility of a legal challenge to that override. The F&S act being repealed by JK means that we’ll never know the outcome.

    So I’m declaring the Treaty as an outlier. Any easier and less controversial examples?

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  51. dbuckley – a couple of comments:

    it does seem that this piece of legislation does indeed attempt to override a contract in the form of the Treaty

    Finally :)

    Given that property rights is essentially the basis of common law – with contract law being a critical element of property rights – extinguishing those rights is implicitly terminating a contract without recourse.

    However it is also quite clear that it does not try to eliminate the possibility of a legal challenge to that override

    Not quite – the law came about in response to a Court of Appeal finding against the government which laid out that they could not extinguish property rights under current legislation. Therefore the legislation was formed to extinguish those rights.

    The clause within the Act allowing appeal was ‘lipstick on the pig’. It was never intended to be valid but the govt wanted to ensure they didn’t override the BORA which allows judicial appeal. It does not mean however, that that appeal need be accepted or upheld by the govt.

    In essence, this legislation is not an outlier. The govt can at will and perfectly legally, extinguish a contract with no recourse. Generally, they just choose not to do so (or make sure they pick easy targets).

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  52. Call me unconvinced :)

    Now I can’t wait to see what happens with the thing that started this thread.

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