Urgent cyber-law report languishes on government shelf

A report which calls for a complete overhaul of our cyber-laws has been left to gather dust on a government shelf despite the support of Police, the Law Society, the Criminal Bar Association and the country's law schools. The report, entitled 'Dishonestly Procuring Valuable Benefits' is the Law Commission's response to the Court of Appeal's decision in a key dishonesty case.

A report which calls for a complete overhaul of our cyber-laws has been left to gather dust on a government shelf despite the support of Police, the Law Society, the Criminal Bar Association and the country's law schools.

The report, entitled "Dishonestly Procuring Valuable Benefits" is the Law Commission's response to the Court of Appeal's decision in the case of R vs Wilkinson. Wilkinson had dishonestly obtained money from a financial institution by claiming to own various vehicles and machinery that could be used as collateral. Although he was found guilty of "obtaining by false pretences", the Court of Appeal ruled in his favour because the bank had electronically transferred the money to Wilkinson's account instead of paying him by cheque.

"It's a matter of tangible versus intangible," says Claudia Batten, a solicitor with IT-specialist law firm Russell McVeagh McKenzie Bartleet. She says because the money was transferred electronically, rather than by making out a cheque or handing over cash, in the eyes of New Zealand law, the crime didn't take place. "The Crimes Act talks of 'anything capable of being stolen' and the Court of Appeal came to the conclusion that electronic transfers didn't fit the bill," says Batten.

The Law Commission report, available from the commission's Web site at www.lawcom.govt.nz, says the ruling is dependent in part on a 1757 statute designed to do away with the subtle distinctions between larceny and fraud. "The decision in Wilkinson … points to a yawning gap in the criminal law which in the view of the court requires attention; in our view, the need for attention is urgent." As the report points out, the ramifications of such a ruling are tremendous.

"Consider the dishonest person who obtains a financial benefit by means of oral misrepresentations or the use of someone else's personal identification num-ber."

The report goes on to say that a number of financial institutions no longer handle loan payments on any other basis than electronic.

New Zealand law closely follows UK law, and amendments were made to the Theft Act 1968, coming into effect in 1996. But the Law Commission points out several failings with the UK act that could be easily overcome here in New Zealand.

"There seems no advantage in confining a reform to money and banking." The commission suggests rewording the relevant sections to include broader areas, such as share trading and so-called loyalty-card schemes — Flybuy points and the like. The commission would like to see the government review the entire Crimes Act to include crimes against intangible goods, and the report comments on the lack of progress in this area.

"The Crimes Consultative Committee, chaired by Justice Casey, reported to the Minister of Justice in April 1991 … but nothing more seems to have happened."

The Minister of Justice, Tony Ryall, is waiting for advice from the ministry before taking the issue any further.

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