I lead for the Opposition in debate on the Electronic Conveyancing Enforcement Bill 2022. The bill seeks to establish and apply an enforcement regime for electronic network operators or, as we refer to them, ELNOs. The enforcement regime will be limited to New South Wales. Labor does not oppose the bill. In May the Parliament passed the Electronic Conveyancing (Adoption of National Law) Amendment Bill 2022, which further developed the national scheme for the electronic lodgement and processing of conveyancing transactions, along with enabling interoperability so new lodging network operators could more easily enter the market. The Minister, in his reply to the second reading debate, told the House:
I note that Labor supports interoperability but wants continued stakeholder consultation and a holistic regulatory framework—which is exactly what we are doing. The bill provides the powers that will allow a comprehensive regulatory package.
I am somewhat surprised that, having passed that bill, we are now back not six months later to pass legislation that the Minister, in his second reading speech, said "will allow the New South Wales Registrar General to properly regulate the flourishing electronic conveyancing ecosystem." During debate on the previous Electronic Conveyancing National Law [ECNL] bill, Labor raised concerns over the crucial need for not just ongoing consultation with industry stakeholders but also a holistic regulatory regime that would cover both ELNOs and subscribers. I am hopeful that, when the next ECNL bill is brought before the House, it achieves that end. It is somewhat ironic that six months ago Labor moved an amendment in line with the findings of the upper House committee inquiry that would have seen the Registrar General present a report to the Parliament detailing the readiness of the interoperable system before it was to go live. The Government opposed that amendment, arguing that we must have a nationally consistent approach.
Back in March the Electronic Conveyancing (Adoption of National Law) Amendment Bill 2022 was referred to an upper House committee, which explored the way forward in developing interoperability and the regulatory framework, along with future legislation in this space. The committee was made up of members of the Government, the Opposition, The Greens, and the Shooters, Fishers and Farmers Party. It is important to revisit the findings and recommendations of that committee in debating the bill. I understand that other States have held off introducing State-specific legislation, instead remaining committed to that national uniformity. The committee made three key findings:
There is unanimous support for competition in the electronic conveyancing industry.
Stakeholders hold valid concerns around the resilience of the system. Further safeguards to protect consumers, including the industry code and an assessment of readiness by the NSW Office of the Registrar General, should be developed and finalised well in advance of the commencement of interoperability.
A second bill, foreshadowed for introduction later in 2022, has been suggested as a pathway for further amendment to theElectronic Conveyancing (Adoption of National Law) Act 2012 and for any outstanding details to be addressed.
Further, the committee made two recommendations:
That the Legislative Council proceed to debate the Electronic Conveyancing (Adoption of National Law) Amendment Bill 2022, and that the concerns identified by stakeholders as set out in this report be addressed during debate in the House.
That the Legislative Council consider the second bill, referred to in Finding 3, only after the industry code has been finalised and the Legislative Council has received a report from the NSW Office of the Registrar General assessing the readiness of the system.
Firstly I will address recommendation 1. The Legislative Council debated the bill, including amendments to address stakeholder concerns about passing the bill unamended, in line with the pathway forward laid out by the committee, which included Government members. Further to finding 2, which outlines the need for further safeguards to protect consumers, which would include the development of an industry code and the assessment of readiness by the New South Wales Office of the Registrar General, the industry code has not yet been fully developed and work remains underway.
Finding 3 and recommendation 2 outline further issues to be addressed in a second bill in 2022 and for that bill to be considered only after the industry code has been finalised, but I am advised that the industry code will not be completed until 2023. Further, the committee heard evidence, which informed finding 3 and recommendation 2, that the bill would be forthcoming this year to amend the Electronic Conveyancing (Adoption of National Law) Act 2012. The Electronic Conveyancing Enforcement Bill 2022 will promote compliance with the ECNL but be a standalone Act. In his second reading speech, the Minister stated:
... implementing a national regime is difficult, with each jurisdiction having different requirements around things like judicial process and the manner of imposing or collecting fines. Resolving these differences nationally takes time—but the longer it takes, the longer New South Wales is left without appropriate enforcement powers.
Labor looks forward to the second ECNL bill being brought before this House to further interoperability to in the e-conveyancing space. To the content of the bill we are currently debating, it allows the Registrar General to issue a written enforceable undertaking to an ELNO if it believes it is contravening the ECNL, and the Registrar General will be able to apply to the Supreme Court to force the ELNO to comply with the order and potentially force them to pay for the costs of proceedings or of the registrar in monitoring compliance.
The bill will also allow the Registrar General to deliver a remedial direction to an ELNO, including interim remedial directions in emergency circumstances. An emergency direction would be given if the registrar considers that the operation, security, integrity or stability of an electronic lodgement network [ELN], the titles register or the land titles system are being or are likely to be jeopardised because of the occurrence of an event or the existence of particular circumstances. Those interim remedial orders will last for 21 days. The bill also establishes a civil penalties regime for a contravention of an enforcement provision. That includes the event when an ELNO fails to interoperate as required under section 18A of the ECNL Act, which has a maximum penalty of $1.65 million plus $44,000 each day. Fines also apply if an ELNO fails to cooperate with a compliance examination under section 34 of the ECNL, with a maximum fine of $110,000, or if they fail to comply with a remedial direction, drawing a $1.65 million fine.
I understand the bill has undergone changes as a result of stakeholder feedback, and it is stakeholders who are supportive of the bill. I ask the Minister to clarify for stakeholders that once a national regulatory framework is established, this bill will be repealed. One stakeholder, the Australian Institute of Conveyancers [AIC], has raised concerns over the need for State-exclusive legislation that fails to include subscribers. The Minister mentioned the existing regulation of subscribers is satisfactory. The AIC has raised concerns with the Government over the current regulation of conveyancers by Fair Trading, describing the system as not fit for purpose. I ask the Minister to address the concerns raised by the AIC. As I said from the outset, Labor will not oppose the bill. I look forward to the Australian Registrars' National Electronic Conveyancing Council completing its work and creating a national regulatory framework. I commend the bill to the House.