[This is a draft of a Review Essay of a new edition textbook, comparing mainly developments in Australia. The Trans-Tasman developments in consumer law can be usefully compared to those in Asia including Japan, which Prof Souichirou Kozuka and I recently compared with Australia.]
Kate Tokeley and Victoria Stace (eds) Consumer Law in New Zealand
(3rd ed 2022, LexisNexis NZ Ltd, Wellington) lxxii + 769pp
This rich and authoritative textbook deserves a wide readership among researchers, practitioners and policy-makers also beyond New Zealand, especially in Australia – but potentially too across Asia, for example, where consumer law is similarly developing apace. This review essay gives a taste of the book’s scope and points of comparative interest, particularly from a trans-Tasman perspective. Overall, it highlights how New Zealand’s consumer law has long been influenced by Australia and sometimes in turn impacted the latter, but has arguably provided less protection, although NZ has introduced some similar reforms in recent years. Various reasons for this disparity are proposed briefly by way of conclusion below, but this textbook provides an excellent basis to explore that theoretical question as well as for readers seeking more specific practical analysis of consumer law in NZ.
The pioneering first edition of this textbook (2000, Butterworths) was written by Kate Tokeley of Victoria University of Wellington (VUW), who then authored parts and edited the lengthier second edition (2014, LexisNexis, 543pp) with seven other consumer law experts. For this even more detailed third edition, she was joined as co-editor by Victoria Stace (also now at VUW) and three contributors to the previous edition as well as three new authors.
This book is divided neatly into seven parts: (1) introduction and general themes (comprising Tokeley’s chapters 1 and 2 on consumer law history and, very interestingly, rationales); (2) defective goods and services (Tokeley’s chapter 3 on pre-sale product safety rules and chapters 4-6 on the coverage, rights and remedies under the Consumer Guarantees Act 1993 or CGA); (3) consumer education (chapters 7-9 by Canterbury University’s Debra Wilson, expert on the Fair Trading Act 1986 [FTA] and some more specific enactment regulating advertising and labelling); (4) unfairness and unconscionability (chapters 10-12 respectively on unfair terms by Alex Sims from the University of Auckland, unconscionable conduct in trade by Stace, and unfairness in particular selling methods by Wilson); (5) financial consumer protection (chapters 13-14 by Stace providing an overview and then focusing on the retail investment market, chapters 15-16 by Barry Allan on consumer credit); (6) consumers and technology (chapter 17 on contract formation and chapter 18 on data collection, privacy and consumer manipulation by Colin Gavaghan and Simon Connell, being much expanded of course compared to the second edition); and (7) dispute resolution (chapter 19 generally on “access to justice for consumers” by Bridgette Toy-Cronin, and Sims’ chapter 20 detailing the “industry-specific dispute resolution schemes”).
Defective Good and Services
On pre-sale product safety rules, hearkening back to her chapter 2 on consumer law rationales, Tokeley begins by highlighting that these rules “are paternalistic in nature in that they limit consumers’ freedom to choose what are deemed to be unsafe products”, although there are “strong arguments that overall consumer welfare is improved if we are protected from products that pose a real danger of causing injury or death” (p51). She notes that the OECD has called for a general consumer right to safe products, yet New Zealand’s FTA only sets six mandatory product safety standards for general consumer (mostly children’s) products, compared to over 40 under the Australian Consumer Law (ACL, p53).
Tokeley asks whether New Zealand should add a general safety provision (GSP) requiring all consumer products to be safe before being put on the market, especially as no claims for personal injury caused by unsafe products can be brought (since the introduction of a state-run no-fault compensation scheme in the early 1970s). She notes that this requirement has operated in the EU for over 20 years (in fact, since a 1992 Directive) and similarly enacted in Canada in 2010 and (in fact, not as extensively) in Singapore in 2011. We could add that a GSP also applies in former colonies Hong Kong and Macau, Malaysia and (since 2019) Thailand, and enactment in Australia has been long discussed including through a (stalled) Regulatory Impact Statement consultation in 2019.
Tokeley observes that determining whether a GSP would be a good idea in New Zealand “would require a debate about how to balance safety interests against consumer freedom of choice and increases in enforcement and monitoring costs” (p54). Such a debate would seem timely, given extensive arguments and evidence now from comparable economies, and the very high value that the government in New Zealand (and to a lesser extent Australia) was prepared to put on saving lives during the COVID-19 pandemic. Introducing a GSP would also seems more advantageous in New Zealand as there have only been three “product safety policy statements” issued seeking voluntary compliance by suppliers, since 2013 amendments to the FTA (ss 30A and 30B, p56). Furthermore, a duty on suppliers to notify voluntary recalls was only added in 2013 (long after Australia), but New Zealand still lacks a duty to report serious product related accidents (added in the ACL since 2010) and other risks (as in the EU and Canada, for example).
This textbook’s discussion of the 1993 CGA is also very useful for Australian consumer law experts. The ACL in 2010 largely slotted in the CGA regime (including especially its set of statutory remedies for the supply of defective goods or services) in lieu of the mandatory statutory warranties introduced by the ACL’s predecessor Trade Practices Act (Cth) 1974. The CGA was also influenced by some Canadian legislation, and it is also largely adopted by Malaysia’s Consumer Protection Act 1999. Tokeley’s discussion of New Zealand (and some Canadian) case law and academic commentary is therefore very relevant for Australian experts. Interestingly, for example, a District Court in New Zealand had ruled already in Cooper v Ashley & Johnson Motors Ltd  DCR 170 that accumulated minor defects can add up to a substantial (or major) failure, justifying extra CGA remedies such as a refund rather than merely repair or replacement. Tokeley also notes a similar approach taken by some Saskatchewan courts (pp 145-6). We could add that this wheel had to be reinvented by tribunals and lawmakers in Australia, but the ACL was recently amended to clarify this possibility (s260), partly given the persistent problem of “lemon” vehicles in Australia.
Also interesting from a Trans-Tasman perspective is the narrower scope of application of the CGA. It only applies to “consumers” as defined in s2(1) as those (a) acquiring goods and services (objectively) of a kind “ordinarily acquired for personal, domestic, or household use or consumption”, plus (b) not for the (subjective) purpose of resupply in trade or consuming them for production etc. The ACL (s3) tries to add certainty to the first limb (a) by extending the scope of “consumer” guarantee coverage to all purchases under a monetary threshold (recently increased to A$100,000), albeit still subject to the second limb (b) exclusions. This means that more business-to-business (B2B) transactions are probably covered by the mandatory guarantees in Australia.
New Zealand also allows more contracting out than in Australia, in that CGA s43 (modified in 2013 in line with an FTA insertion) allows parties both in trade to agree in writing to exclude the mandatory “consumer” guarantees provided this is “fair and reasonable” (as elaborated in a new s43(2A), p94). By contrast, the ACL only allows parties to agree on terms specifying more limited liability (excluding consequential damages etc.) if the goods or services are not ordinarily for personal use (s64A).
New Zealand may also allow more scope for parties, especially perhaps in B2B transactions, to exclude the application of the CGA regime altogether by expressly agreeing on a foreign law to govern all disputes related to their contract. Tokeley notes that under traditional private international law principles, the threshold for overriding the parties’ express choice of law based on a “public policy exception is exceptionally high” (p104). She adds that the CGA does not contain any express provision dealing with this issue that could be construed as an overriding mandatory statutory provision preventing parties from choosing a foreign governing law, contrasting ACL s67 as interpreted (perhaps in a rather strained way) in Valve Corporation v ACCC  FCAFC 224. However, Tokeley indicates that New Zealand courts might not apply either traditional private international law approach to determine this possibility of parties choosing a foreign law. They might instead adopt an “ordinary statutory interpretation approach” – divining what the legislator intended from its text and purpose – as applied in the cross-border employment dispute of Brown v New Zealand Basing Ltd  NZSC 139, even though the outcome of such an approach “applied to the [CGA] is difficult to predict” (p106).
In my view, her subsequent brief analysis suggests that it might result in consumers in a narrower (EU-style) sense, namely individuals contracting for non-business purposes, but not necessarily businesses being protected against at least some foreign governing law clauses. After all, earlier Tokeley notes that a new s1A added in 2013 to the CGA (again, mirroring that added to the FTA) clarifies that the legislative purpose is “consumer protection but that this is also balanced against businesses being able to compete effectively and participate int the market with confidence” (p69). This unresolved issue certainly deserves public consultation by policy-makers, both in New Zealand and Australia, especially as an agreed foreign law clause can be combined with a clause providing for exclusive jurisdiction of a foreign court or arbitral tribunal – although Sims later remarks that the latter type of clause may be void as unfair (p315).
Misleading and Unconscionable Conduct
Chapter 8, where Wilson sets out the “general rules on misleading and deceptive conduct and misrepresentations”, is also interesting because the FTA statutory prohibitions and then New Zealand case law were heavily influenced by Australian law. However, it seems that the Supreme Court in Red Eagle Corp Ltd v Ellis  NZSC 20 has developed a simpler one-step approach to determining misleading conduct in at least some situations (pp192-3). More unusual for Australian consumer law experts will be the helpful discussion of the Contract and Commercial Law Act 2017. That subsumed the Contractual Remedies Act 1979, which had adjusted common law rules on misrepresentations and termination of contracts. Again, the 2017 legislation retained the capacity for parties to agree on “ouster” clauses preventing investigation into whether pre-contractual statements were made or relied on, for example, but provided these were “fair and reasonable” (e.g. between commercial parties of equal bargaining power advised by lawyers, pp 241-3).
Chapter 11 by Stace contains even more extensive (and well-argued) analysis of the complex and evolving Australian case law on statutory “unconscionable conduct in trade”, which is informed but not limited by equitable doctrines (pp 349-70). This is justified because New Zealand only added such a prohibition to its FTA (s7) with effect from 16 August 2022. Stace explains how the New Zealand Commerce Commission (enforcing the FTA) favoured adopting the ACL’s approach, which had developed legislatively since 1986 and especially 1992, when in 2018 a consultation paper was released by New Zealand’s Ministry of Business Innovation and Enterprise (MBIE, which had subsumed the Ministry of Consumer Affairs). To address survey and other evidence about gaps in the legislative framework and poor practices by businesses, towards consumers but also other businesses, MBIE had instead favoured the option of enacting a prohibition against “oppressive” conduct (centred on the “reasonable standard of commercial practice” test) modelled on consumer credit contract law. Neither government entity favoured the option of prohibiting unfair practices along EU Directive lines, with MBIE assessing this option as “the most complex and uncertain” (p336) although it has long been operating in the EU, United Kingdom and for example Singapore.
However, Stace later notes (p370) that in the wake of the ACCC’s Digital Practices Inquiry Final Report (June 2019), for example: “There is some regulatory support for the introduction of a more general prohibition on unfair conduct in trade in Australia. It is likely that the New Zealand government would have to consider something similar in New Zealand, if such a prohibition were introduced in Australia, in the interests of harmonisation of business law between the two countries” (p370). Since the book was published, pressure towards adding this wider prohibition has kept growing in Australia. This is partially caused by growing awareness and concern, especially given the expansion of e-commerce particularly during the pandemic, about the use of “dark patterns” to manipulate consumer behaviour (helpfully summarised by Gavaghan and Connell at pp641-9) through business systems that are not readily impugned as misleading or unconscionable.
Unfair Contract Terms
Australian experts will also find familiar and useful the discussion by Sims of “unfair contract terms” regulation in chapter 10, as this too was added to the FTA in 2013 (with effect from 2015) “modelled on Australia’s law, albeit there are significant differences” (p288). The most important distinction in the ACL regime applied nationwide since 2010, based on Victorian state legislation enacted a decade earlier based on a 1993 EU Directive (and supplemented by the Contracts (Review) Act 1980 still curiously in effect in New South Wales), is that unfair terms in Australia can be asserted by consumers as void.
By contrast, New Zealand’s regime since 2015 requires the Commerce Commission to bring proceedings for Court declarations that the term is void. A concern underlying this narrow standing requirement, not found either across Europe or many other jurisdictions enacting similar unfair contract terms rules for consumers, was reportedly that allowing consumers directly to challenge unfair terms (as urged in 2010 by the then Ministry of Consumer Affairs) would mean more transaction costs for traders (p289). Sims notes that her prediction in the second edition textbook, that the limited standing and resources for the Commerce Commission would mean few declarations being sought, has been borne out: only three applications had been made when she wrote for this third edition (December 2021), despite significant evidence that unfair terms are widespread (p290). Unsurprisingly, therefore, too, the chapter by Sims includes many more references to Australian case law on unfair terms than the few New Zealand court judgments.
A second significant Trans-Tasman difference is the scope of the main regime voiding unfair terms. Under the ACL, it applies to individual consumers transacting for non-business purposes (s23). In New Zealand, this is similar for dealings in land. However, for goods and services its unfair terms regime adopts the same definition as for the CGA as mentioned above (ordinarily for personal use etc., but not for resupply etc.: p293). In addition, the ACL added protections for “small business contracts” already in 2016, defined by setting a maximum contract amount plus number of employees. ACL amendments in November 2022 (in force from a year later) remove the contract amount threshold, and extend protection if at least one party employs fewer than 100 (rather than 20) employees. By contrast, the FTA was amended with effect again only from 22 August 2022 and protects against unfairness in “small trade contracts” defined solely by reference to a maximum contract amount (p288).
A third difference, not evident from this textbook because it was published after the ACL November 2022 amendments, is that an initial use of a term found unfair will attract civil penalties. Under the prior scheme (still found in New Zealand), penalties only applied for continuing to use a term declared unfair by a court. (Australian penalties are also significantly higher than for contravention of the consumer protection provisions in New Zealand’s FTA and CGA, as noted already in some other parts of this book.) The November 2022 ACL amendments also clarify that Australian courts can make orders applying to any existing contract entered into by a respondent containing a substantially similar term to one the court has declared to be unfair, and/or which prevents a term from being included in future contracts. This too could be a useful way to make the New Zealand regime more effective. Its present FTA only provides that once the court declares the term void (if challenged by the Commerce Commission), this “automatically extends to the trader’s contracts with other consumers. The trader would therefore be unable to enforce that term against other customers who had entered into the same standard form contract” (p304).
It should also now be added that from November 2021 the federal Treasury began consulting about allowing ACL regulators also to impose civil penalties on suppliers that do not provide consumers remedies for at least major failures under the consumer guarantees regime, perhaps only for goods or services that are causing more problems (such as lemon vehicles). The proposal parallels a recommendation from the Productivity Commission’s Right to Repair report, made public on 1 December 2021. Such a reform would supplement the ACL regulators’ powers to bring representative actions for violations of consumer guarantees if consumers opt-in, which the regulators however have been curiously loath to use. New Zealand regulators lack even the latter power (cf p697), and policy-makers in that country could consider whether the Treasury’s more recent initiative would significantly reduce problems uncovered by evidence cited in this textbook regarding unfair terms and practices more generally.
Access to Justice for Consumers
In New Zealand, therefore, prospects for “public enforcement” of consumer rights have been more restricted than in Australia. More reliance therefore must be placed on New Zealand consumers knowing about and then enforcing their rights themselves. Yet Toy-Cronin remarks in chapter 19 that a “2020 survey found that almost all consumers were aware that laws exist in New Zealand to protect their consumer rights, but detailed knowledge of those rights was less widespread … only 26 per cent of consumers answered at least six of the ten scenarios about consumer problems correctly” (p672). Incidentally, such more specific questions would be useful to pose to Australian consumers, in multiple national surveys and recently one just for Victorian consumers.
Her chapter on “access to justice for consumers” shows that there is significantly less available first through the courts, in that there is still no US-style opt-out class action regime to efficiently aggregate small claims (as in Australian federal courts since 1992, and various states starting with Victoria from 2000). However, Toy-Cronin notes that the New Zealand Law Commission was investigating this possibility (pp 690-1). We can add now that in June 2022 it issued a Final Report recommending enactment of a scheme quite similar to Australia’s class action regime, as well as recommendations about third-party litigation funding, which has become a major part of Australia’s civil litigation landscape since 2007. She also notes that New Zealand lacks a regime for pure contingency fees, where lawyers agree with clients to fund litigation themselves in exchange for a percentage of damages obtained (pp687-9). Plaintiff lawyers and some other groups pressed strongly to allow this in Victoria, with reforms in effect from 1 July 2020 for class actions.
As for what Toy-Cronin’s chapter 19 outlines as “self-help” options for consumer access to justice, some of the concerns about disputes tribunals seem similar to those raised for Australian counterparts. These include some formalisation of proceedings, challenges in enforcing tribunal rulings, and concerns about whether “the current balance is right” between procedural fairness and expeditious dispute resolution given that the same adjudicator also has a preliminary role in encouraging settlement (p679). She adds that a 2008 response by the Government to a Law Commission inquiry into Disputes and other tribunals, aiming to reduce ad hoc elements and duplication of resources through a more uniform regime, has not progressed (p683). This contrasts with reforms combining administrative and consumer tribunals in Victoria and New South Wales, for example, which seem to have been fairly successful. There also seem to be fewer developments to expand online dispute resolution (p675), compared to Australia where the Digital Platforms inquiry has kept this more firmly on the agenda. Another development that New Zealand might consider copying is a UK-style “super complaints” procedure, expected to be enacted this year, whereby peak consumer groups can provide evidence of widespread harm, to regulators who then need to respond publically within a specific timeframe.
In sum, this is an excellent textbook detailing all elements of consumer law in New Zealand, deftly combining legislative analysis, case law, illuminating further examples, academic commentaries and recent developments, which should be on the shelves or computers of all Australian consumer law experts. The many comparisons made with Australia, and some of the additional ones added in this review of the book, also leaves a wider question. Why is it that the protection for consumers seems nonetheless to remain less extensive in New Zealand, despite a long history of Trans-Tasman business law harmonisation and other close legal cooperation? The evidence presented in this textbook suggests that the answer is not that New Zealand traders are much better behaved than Australian counterparts.
One possible explanation from political history is that the Labour Governments in New Zealand (1984-1990) pursued a more extensive deregulatory agenda than the Hawke/Keating Labor Governments in Australia, and this more laissez-faire mentality perhaps carried over into subsequent Governments (largely equally split between Labour and National Governments). New Zealand has also not seen the same phenomenon of small and even large businesses pressing ministers in Australia to add protections for ever more B2B transactions, not just protections for consumers in the narrower (EU-style) sense. Federal and state ministers have often been open to such entreaties, for better or worse, perhaps because many smaller businesses are sole traders who also therefore vote in elections.
A more socio-economic factor could be that although New Zealand has a higher proportion of indigenous and Pacific Island background consumers, Australia has long had a higher intake per capita of humanitarian and other immigrants. Those have included many whose native language is not English and can therefore be seen as in further need of consumer law protections. A more institutional explanation might be that Australian consumer law regulators have developed more critical mass, not only for enforcing laws but advocating for further reforms, benefitting also from multiple reports from the influential Productivity Commission (with an analogue operating in New Zealand only since 2011). A political economy aspect may be that Australia’s federal system has generated more of a “California effect” (or “trading up” to stronger regulator standards), rather than a deregulatory “Delaware effect”. Another possible explanation from comparative legal history or philosophy is that New Zealand contract law and supporting legal institutions have favoured more formal rather than substantive reasoning, at least traditionally.
Such broader speculations, and therefore prospects for further convergence or divergence between New Zealand and Australia, merit further investigation. For such theoretical as well as practical purposes, by offering a comprehensive and deep understanding of New Zealand consumer law, this textbook provides an excellent basis to assess similarities and differences compared to Australia, and potentially other jurisdictions particularly around the Asia-Pacific region.
 See generally eg Nottage, Luke R. and Paterson, Jeannie Marie, Consumer Contracts and Product Safety Law in Southeast Asia: Partly Trading Up? (June 25, 2019). in Hsieh, Pasha L.; Mercurio, Bryan (eds), “ASEAN Law in the New Regional Economic Order: Global Trends and Shifting Paradigms”, Cambridge University Press, 2019, Sydney Law School Research Paper No. #19/37, Available at SSRN: https://ssrn.com/abstract=3409602; and Howells et al (eds) Consumer Protection in Asia (Hart, 2022) https://www.bloomsbury.com/au/consumer-protection-in-asia-9781509957545/
 For some earlier comparisons, see also Nottage, Luke R. and Riefa, Christine and Tokeley, Kate, Comparative Consumer Law Reform and Economic Integration (2013). CONSUMER LAW AND POLICY IN AUSTRALIA AND NEW ZEALAND, J. Malbon and L. Nottage, eds, Federation Press, Australia, 2013, Sydney Law School Research Paper No. 15/77, Victoria University of Wellington Legal Research Paper No. 15/2016, Available at SSRN: https://ssrn.com/abstract=2662295
 Nottage, Luke R., Improving the Effectiveness of the Consumer Product Safety System: Australian Law Reform in Asia-Pacific Context (February 3, 2020). Journal of Consumer Policy (2020) 43:829-850, also at https://ssrn.com/abstract=3530671
 For an analysis of divergent Australian tribunal decisions, arguably influencing the ACL amendment, see Jeannie Paterson “The Consumer Guarantee Remedial Regime: Some Uncertainties and the Role of Common Law Analogy” 33 Journal of Contract Law (2006) 210 at 221-3.
 Compare also generally Garnett, Richard, “Arbitration of Cross-Border Consumer Transactions in Australia: A Way Forward?” (2017) 39(4) Sydney Law Review 569, also at http://classic.austlii.edu.au/au/journals/SydLawRw/2017/23.html; Teramura, Nobumichi and Nottage, Luke R. and Morrison, James, International Commercial Arbitration in Australia: Judicial Control over Arbitral Awards, in “The Cambridge Handbook of Judicial Control of Arbitral Awards”, edited by Larry A. DiMatteo, Marta Infantino and Nathalie M-P Potin, Cambridge University Press, 2020, pp. 175 – 197, also at https://ssrn.com/abstract=3379494
 For an early comparison of unconscionability and other doctrines, including undue influence (touched on at pp647-8 in this textbook’s discussion of “dark patterns”), see also Nottage, Luke R., Form and Substance in US, English, New Zealand and Japanese Law: A Framework for Better Comparisons of Developments in the Law of Unfair Contracts. Victoria University of Wellington Law Review, Vol. 26, pp. 247-292, 1996, also at https://ssrn.com/abstract=842684
 See Nottage, Luke R. and Kozuka, Souichirou, Consumer Law Redress and Administration, Product Safety Regulation and Contracts in Japan and Australia (May 26, 2023), manuscript at https://ssrn.com/abstract=4459890
 For an assessment of this reform, combined with the expansion of protections to more B2B transactions, see Jeannie Paterson and Hal Bolitho, “Unfair terms and legitimate business interests in standard form small business contracts” (2023) 30 CCLJ 19.
 See https://consumer.gov.au/consultations-and-reviews/australian-consumer-survey and https://cprc.org.au/vic-consumers/
 See eg https://www.ibanet.org/contingency-fee-revolution-in-australia.
 Compare eg Nottage, Luke R., Consumer ADR and the Proposed ‘Consumer Law’ in Australia: Room for Improvement (March 29, 2009). QUT Law and Justice Journal, Vol. 9, No. 2, February 2010, pp 176-97, Sydney Law School Research Paper No. 09/10, Available at SSRN: https://ssrn.com/abstract=1370106; and Productivity Commission, Consumer Law Enforcement and Administration – Final Report (12 April 2017) https://www.pc.gov.au/inquiries/completed/consumer-law.
 See eg the ACCC’s Interim Report (September 2022) https://www.accc.gov.au/about-us/publications/serial-publications/digital-platform-services-inquiry-2020-2025/digital-platform-services-inquiry-september-2022-interim-report-regulatory-reform
 Nottage and Kozuka, op cit (with further references).
 See generally Nottage, Luke R., Asia-Pacific Regional Architecture and Consumer Product Safety Regulation for a Post-FTA Era, in Meredith Kolsky Lewis and Susy Frankel (eds) Trade Agreements at the Crossroads(London: Routledge, 2014) 114-38, earlier version also at https://ssrn.com/abstract=1509810
 See eg https://theconversation.com/new-zealand-has-one-of-the-lowest-numbers-of-refugees-per-capita-in-the-world-there-is-room-for-many-more-162663
 Compare also generally Nottage and Paterson op cit
 See generally eg Nottage (1996 VUWLR) op cit, and Nottage, Luke R., Tracing Trajectories in Contract Law Theory: Form in Anglo-New Zealand Law, Substance in Japan and the United States, Yonsei Law Journal, Vol. 4, No. 2, pp. 175-271, 2013, Sydney Law School Research Paper No. 13/37, also at https://ssrn.com/abstract=2270889