This section, section 1, subpart 3 of Part 3, section 138, section 141(2) and (3), and Schedule 3 come into force on the day after the date on which this Act receives the Royal assent.
(2)
Part 1 (other than this section), subpart 4 of Part 2, Parts 4 and 5, and sections 132 to 137 come into force,—
(a)
for the purpose of applying those provisions to buy-back transactions, on the day after the date on which this Act receives the Royal assent; and
(b)
for all other purposes, on 1 April 2005.
(3)
The rest of this Act comes into force on 1 April 2005.
3-
Purposes
The purposes of this Act are—
(a)
to protect the interests of consumers in connection with credit contracts, consumer leases, and buy-back transactions of land; and
(b)
to provide for the disclosure of adequate information to consumers under consumer credit contracts and consumer leases—
(i)
to enable consumers to distinguish between competing credit arrangements or competing lease arrangements; and
(ii)
to enable consumers to become informed of the terms of consumer credit contracts or consumer leases before they become irrevocably committed to them; and
(iii)
to enable consumers to monitor the performance of consumer credit contracts or consumer leases; and
(c)
to provide rules about interest charges, fees, and payments in relation to consumer credit contracts; and
(d)
to enable consumers to seek reasonable changes to consumer credit contracts on the grounds of unforeseen hardship; and
(e)
to provide for the disclosure of adequate information to consumers under buy-back transactions of land and for the provision of independent legal advice to those consumers—
(i)
to inform consumers of the terms, the effects, and the implications of those transactions before they become irrevocably committed to them; and
(ii)
to enable consumers to monitor the performance of those transactions; and
(f)
to provide rules about fees in relation to buy-back transactions of land; and
(g)
to prevent—
(i)
oppressive credit contracts, consumer leases, and buy-back transactions of land; and
(ii)
oppressive conduct by creditors under credit contracts, lessors under consumer leases, and transferees under buy-back transactions of land.
4-
Overview
In this Act,—
(a)
this Part deals with preliminary matters, including interpretation and the application of this Act to the Crown:
(b)
Part 2 contains provisions relating to consumer credit contracts, including provisions relating to when a credit contract is a consumer credit contract, when a lease of goods is to be treated as a consumer credit contract (instead of a consumer lease), disclosure, interest charges, fees, payments, and changes to consumer credit contracts on the grounds of unforeseen hardship:
(c)
Part 3 contains provisions relating to consumer leases, credit-related insurance, repayment waivers, extended warranties, and buy-back transactions of land:
(d)
Part 4 contains provisions relating to civil remedies, injunctions, offences, a defence, and certain provisions concerning the Commerce Commission:
(e)
Part 5 contains provisions relating to the reopening of oppressive credit contracts, consumer leases, and buy-back transactions of land:
(f)
Part 6 contains miscellaneous provisions, including provisions relating to contracting out, regulations, consequential amendments, and transitional arrangements.
5-
Interpretation
In this Act, unless the context otherwise requires,—
advance means—
(a)
money provided to the debtor or to another person to the order of the debtor:
(b)
a pre-existing monetary obligation of the debtor that is paid, discharged, or consolidated by the creditor:
(c)
the cash price of any property or services purchased by the debtor from the creditor:
(d)
in the case of the use of a credit card to purchase property or services from a person who is not the creditor or to obtain money, the agreed price of the property or services or the monetary amount, as the case may be
annual interest rate means a rate specified in the credit contract as an annual interest rate
broker means a person who, for consideration, assists a person in obtaining credit
buy-back default fees means fees or charges payable on a breach of a buy-back transaction by an occupier or on the enforcement of a buy-back transaction by a transferee
buy-back fees means fees or charges payable by the occupier under a buy-back transaction, or payable by the occupier to, or for the benefit of, the transferee in connection with a buy-back transaction (including any insurance premiums payable if the transferee requires the occupier to obtain insurance cover from a particular insurer); but does not include the following:
(a)
a buy-back default fee:
(b)
government charges, duties, taxes, or levies
buy-back promoter means a person who introduces the parties to a buy-back transaction to each other if—
(a)
the person receives a fee in connection with the buy-back transaction from the occupier, the transferee, or any other person; or
(b)
an associated person of that person receives a fee in connection with the buy-back transaction from the occupier, the transferee, or any other person
buy-back transaction has the meaning set out in section 8
cash price, in relation to property sold or leased, or to services provided under a contract, means—
(a)
the lowest price at which a person could have purchased that property or those services from the vendor, lessor, or provider on the basis of payment in full at the time the contract was made; or
(b)
if there is no price in accordance with paragraph (a), the fair market value of that property or those services at the time the contract was made
charge for an optional service means a fee or charge for a service or benefit that is offered to the debtor in connection with a credit contract if the debtor does not have to accept the service or benefit as a condition of entering into the contract
Commission means the Commerce Commission established by the Commerce Act 1986
consumer credit contract has the meaning set out in section 11
consumer credit insurance means insurance cover in the event of the insured's disability or death or the insured contracting a sickness, sustaining an injury, or becoming unemployed, if the liability of the insurer is to be determined by reference to the liability of the insured under a credit contract or a consumer lease
consumer lease has the meaning set out in section 60
court means, in relation to any matter, the court, tribunal, or arbitral tribunal by or before which the matter falls to be determined
credit has the meaning set out in section 6
credit contract has the meaning set out in section 7
credit fees means fees or charges payable by the debtor under a credit contract, or payable by the debtor to, or for the benefit of, the creditor in connection with a credit contract (including any insurance premiums payable if the creditor requires the debtor to obtain insurance cover from a particular insurer); but does not include the following:
(a)
interest charges:
(b)
a charge for an optional service:
(c)
a default fee or a default interest charge:
(d)
government charges, duties, taxes, or levies
credit limit means the maximum unpaid balance permitted under the credit contract
credit-related insurance means, in connection with a credit contract or consumer lease,—
(a)
insurance over secured property or leased goods; or
(b)
insurance that provides cover for the shortfall that occurs if secured property or leased goods are totally or substantially destroyed and the insurance proceeds from another insurance contract are insufficient to pay any outstanding obligations of the debtor under the credit contract or the lessee under the consumer lease; or
(c)
consumer credit insurance
credit sale means a contract involving the sale of property or the provision of services under which payment of the whole or a part of the purchase price is deferred; and includes a lease that is to be treated as a credit sale under section 16
creditor means a person who provides, or may provide, credit under a credit contract; and, if the rights of that person are transferred by assignment or by operation of law, includes the person for the time being entitled to those rights
daily interest rate means the rate determined by dividing the annual interest rate by 365
debtor means a person to whom credit has been provided, or may be provided, under a credit contract; and, if the rights of that person are transferred by assignment or by operation of law, includes the person for the time being entitled to those rights
default fees means fees or charges payable on a breach of a credit contract by a debtor or on the enforcement of a credit contract by a creditor; but does not include default interest charges
default interest charges means additional interest charges payable on a breach of a credit contract by a debtor
electronic includes electrical, digital, magnetic, optical, electromagnetic, biometric, and photonic
electronic communication means a communication by electronic means
establishment fees means the fees or charges payable under the credit contract that relate to the costs incurred by the creditor in connection with the application for credit, processing and considering that application, documenting the contract, and advancing the credit; but does not include any fee or charge to the extent that it is a charge for an optional service
estate means a fee simple estate, a leasehold estate, or a stratum estate
extended warranty means an agreement between a creditor or lessor and a debtor or lessee under which the creditor or lessor, for an additional consideration, agrees to repair or replace defective goods outside of the warranty period that would otherwise apply
family trust means a trust that is established primarily to benefit either or both of the following:
(a)
a natural person for whom the settlor has natural love and affection:
(b)
an organisation or a trust whose income is exempt under section CB 4(1)(c) or (e) of the Income Tax Act 1994
full costs includes reasonable costs incurred between solicitor and client, fees, and other expenses
full prepayment means the payment of the unpaid balance before the last amount to be paid under the credit contract becomes payable
goods means personal chattels other than money and choses in action
guarantor, in relation to a credit contract,—
(a)
means a person who—
(i)
guarantees the performance of a debtor's obligations under the contract; or
(ii)
indemnifies a creditor against any loss that the creditor may incur in connection with the contract; or
(iii)
assumes liability for performing the obligations of a debtor under the contract; but
(b)
does not include a person who indemnifies a creditor against any loss that the creditor may incur in connection with the contract under a contract of insurance
information system means a system for producing, sending, receiving, storing, displaying, or otherwise processing electronic communications
interest charge means a charge that accrues over time and is determined by applying a rate to an amount owing under a credit contract
lawyer has the meaning given to it by section 6 of the Lawyers and Conveyancers Act 2006
lease means a contract for the hire of goods
occupier has the meaning set out in section 8
oppressive has the meaning set out in section 118
paid adviser means a person who acts for consideration as an adviser to, or as a trustee, nominee, or agent of, 1 or more of the parties; but does not include a person who is an employee of 1 or more of the parties
part prepayment means the payment of an amount that is less than the unpaid balance before that amount is payable under the credit contract
payment, in relation to a credit sale, includes a deposit or a trade-in allowance
property means land, money, goods, choses in action, goodwill, and every valuable thing, whether real or personal, and whether situated in New Zealand or elsewhere
regulations means regulations in force under this Act
related company has the same meaning as in section 2(3) of the Companies Act 1993
repayment waiver means an agreement between a creditor or lessor and a debtor or lessee under which the creditor or lessor, for an additional consideration, agrees to waive the creditor's or lessor's right to any amount payable under the credit contract or consumer lease in the event of the unemployment of, sickness of, injury to, or the disability or death of the debtor or lessee
revolving credit contract means a credit contract, whether or not the contract specifies a credit limit, if the contract—
(a)
anticipates multiple advances, to be made when requested by the debtor in accordance with the contract; and
(b)
does not limit the total amount to be advanced to the debtor under the contract
security interest means an interest in property created or provided for by a transaction that, in substance, secures payment or performance of an obligation under a credit contract, consumer lease, or buy-back transaction, without regard to—
(a)
the form of the transaction; and
(b)
the identity of the person who has title to the property that is subject to the security
transferee has the meaning set out in section 8
unpaid balance means the amount owing under a credit contract at a particular time, being the difference between all amounts credited and all amounts debited to the debtor under the contract at that time
unpaid daily balance, in relation to a day, means the unpaid balance under a credit contract at the end of that day
working day means a day of the week other than—
(a)
a Saturday, a Sunday, Waitangi Day, Good Friday, Easter Monday, Anzac Day, the Sovereign's birthday, and Labour Day; and
(b)
a day in the period commencing with 25 December in a year and ending with 2 January in the following year; and
(c)
if 1 January falls on a Friday, the following Monday; and
(d)
if 1 January falls on a Saturday or a Sunday, the following Monday and Tuesday.
Section 5 associated person: repealed, on 25 August 2005, by section 75 of the Overseas Investment Act 2005 (2005 No 82).
Section 5 lawyer: substituted, on 1 August 2008, by section 348 of the Lawyers and Conveyancers Act 2006 (2006 No 1).
6-
Meaning of credit
In this Act, unless the context otherwise requires, credit is provided under a contract if a right is granted by a person to another person to—
(a)
defer payment of a debt; or
(b)
incur a debt and defer its payment; or
(c)
purchase property or services and defer payment for that purchase (in whole or in part).
7-
Meaning of credit contract
(1)
In this Act, unless the context otherwise requires, credit contract means a contract under which credit is or may be provided.
(2)
If, because of any contract or contracts (none of which by itself constitutes a credit contract) or any arrangement, there is a transaction that is in substance or effect a credit contract, the contract, contracts, or arrangement must, for the purposes of this Act, be treated as a credit contract made at the time when the contract, or the last of those contracts, or the arrangement, was made, as the case may be.
In this Act, unless the context otherwise requires, buy-back transaction means a transaction under which—
(a)
a person (the occupier) transfers, or agrees to transfer, an estate in land to another person (the transferee); and
(b)
the land is the principal place of residence of the occupier at the time that the occupier enters into the transaction; and
(c)
the occupier, or a person designated by the occupier, has, after the transfer, a right to occupy the whole or any part of the land; and
(d)
1 or more of the following applies:
(i)
the occupier, or a person designated by the occupier, has a right to repurchase the estate in the land in whole or in part:
(ii)
there is an understanding between the occupier and the transferee that the occupier, or a person designated by the occupier, has a right to repurchase the estate in the land in whole or in part:
(iii)
there is an understanding between the occupier and any buy-back promoter that the occupier, or a person designated by the occupier, has a right to repurchase the estate in the land in whole or in part; and
(e)
the occupier is a natural person who enters into the transaction primarily for personal, domestic, household, or investment purposes.
(2)
If, by virtue of any contract or contracts (none of which by itself constitutes a buy-back transaction) or any arrangement, there is a transaction that is in substance or effect a buy-back transaction, the contract, contracts, or arrangement must, for the purposes of this Act, be treated as a buy-back transaction made at the time when the contract, or the last of those contracts, or the arrangement, was made, as the case may be.
8A
Meanings of associated and associated person
(1)
For the purposes of this Act, one person (A) is associated with another person (B),—
(a)
if A is connected to B by blood relationship, marriage, or adoption or where A is a trustee for B, and for the purposes of this paragraph—
(i)
persons are connected by blood relationship if they are within the fourth degree of relationship:
(ii)
persons are connected by marriage if one person is married to the other person or to a person who is connected by blood relationship to the other person, or if one person has a relationship in the nature of marriage with the other person or with a person who is connected by blood relationship to the other person (whether or not the parties to the relationship are of the same or different sex):
(iii)
persons are connected by adoption if one person has been adopted as the child of the other person or as a child of a person who is within the third degree of relationship to the other person:
(b)
in the case where B is a company, if A is a director or officer of B, or is associated (within the meaning of paragraph (a)) with a director or officer of B, or is directly or indirectly able to exercise control over the affairs of B:
(c)
in the case where A is a company, if B is a director or officer of A, or is associated (within the meaning of paragraph (a)) with a director or officer of A, or is directly or indirectly able to exercise control over the affairs of A:
(d)
in the case where both A and B are companies,—
(i)
if A is a holding company or subsidiary of B within the meaning of section 5 of the Companies Act 1993; or
(ii)
if A owns or controls shares that in aggregate carry the right to exercise or control the exercise of 20% or more of the voting power at meetings of B; or
(iii)
if B owns or controls shares that in aggregate carry the right to exercise or control the exercise of 20% or more of the voting power at meetings of A; or
(iv)
if A and B have the same holding company within the meaning of section 5 of the Companies Act 1993; or
(v)
if a third person owns or controls shares in each of them that carry the right to exercise or control the exercise of 20% or more of the voting power at meetings of each of them.
(2)
Associated person has a corresponding meaning.
Section 8A: inserted, on 25 August 2005, by section 75 of the Overseas Investment Act 2005 (2005 No 82).
