Legislation And Laws Applicable To A Pharmaceutical Business

Part A

Part  A.

A.Find legislation that applies to your business plan. In this part you need to find legislation that is

a.Criminal law
i.Provide one example of an offence that could potentially apply to your business. Reference the section and the Act. The offence can be either
1.an offence, (which is not a crime)  or 
2.a crime Set out the section title and reference act fully. eg. 

Supporting the commission of a plagiarism offence s. 32(b)(i) Plagiarism Act 2017                                                            
Explain whether your example is a non-criminal offence or a crime.

ii.Explain when this legislation could apply to your business and identify which person(s) may be prosecuted.
iii.Explain who would prosecute.

iv.Explain what must be proved by the prosecution.  This requires you to set out the key elements that must be proved. You will find these in the section. (The section is the ONLY place you will find these). Do NOT write out the whole section. Identify only the key elements.

v.Provide a set of facts which would be sufficient to prove the offence. These are facts from your business that could possibly occur. You will invent these. The facts must ‘fit’ with the key elements you identified in the above question.

vi.Explain the standard of proof required of the prosecution.

vii.Outline the penalties that may apply if you (or someone in your business) is convicted.

b.Civil Law.
i.Provide an example of civil private law that applies to your business. This also legislation but is not criminal law. You can use any NZ statute.

ii.Explain why this is civil and private law. Set out the definition of civil law, and, the definition of private law to answer this question. NOTE – the person suing can be another person or a company. It is better not to use government departments as they are usually seeking penalties (fines) which are not civil law.

iii.Provide a set of facts which would be sufficient to prove the case for the plaintiff.  In this question you set out the key elements of the section, and then, invent facts from your business which would prove the law applies.

iv.Explain the standard of proof required of the plaintiff to win the case.

v.Explain the possible outcomes of the case if the plaintiff wins the case. This means compensation or other remedy that the court may award them.

a. Criminal law

c.Treaty of Waitangi

Explain how the treaty is incorporated into the law, and, its legal effect. Include whether it can be enforced in court.
Give one example of a statute that includes the Treaty and explain how it is used in that law.

d.Constitution

i.Explain 
1.the two elements of the constitution
2.Identify TWO laws that are part of the constitution. One for each element above.  

Part B.

a.Explain the process for the creation of new legislation. List the steps and explain in your own words the step and its purpose. The focus is on the purpose of the step

b.Find a bill that is currently before the house that could apply to your business

i.Explain the purpose of the bill and a clause that may apply to your business

ii.Explain the types of bill and identify what type of bill this is.

iii.Identify the select committee that is involved and who is on the committee.

iv.Identify the stage the bill is currently and what must happen for it to become law. Note how long you think it will take to become law.
i.Explain what delegated legislation, the types of delegated legislation and when this type of law can be challenged in court

ii.Find an example of delegated legislation that applies to your business plan. Explain why it applies.

iii.Identify the empowering act.

iv.Provide a set of facts which show when this law will apply to your business and the implications for the business.

PART C – Interpretation

For this part use a section from any one of the following

The Health and Safety at work Act 2015
The Fair Trading Act 1986
The Commerce Act 1986 – section on trade practices only
Consumer Guarantees Act 1993
Contract and Commercial Law Act 2017
Other legislation – ask the lecturer first by reference to the section you want to use. 

a.Using any section from the legislation above which could apply to your business) find a case where the courts have interpreted the legislation. Identify the legislation and section

b.Explain how the courts interpret legislation using s.5 Acts Interpretation Act 1999. (Do not apply to your plan)

c.Apply the section to your business. Identify actions or events that might happen in your business where this interpretation will apply. Explain the implications of this.

Part D     - Court made law  : Precedent

In this section you must find ONE case that applies common law that could apply to your business.

This cannot be from legislation.

a.Explain and identify the material facts of the case.
b.Explain what is meant by precedent and what the precedent in this case was.
c.Explain the hierarchy of courts and whether this case is binding or persuasive on the High Court of New Zealand.

Part A

The business chosen for the purpose of this assignment is a Pharmaceutical Business. The chosen business falls under Pharmaceutical industry in New Zealand, which is subject to many laws. Companies like Roche Products (New Zealand) Limited and Douglas Pharmaceuticals being the competitors within the industry. However, all companies belonging to this industry have to comply with all the provisions laid down in Misuse of Drugs Act, 1975.

The purpose of this Act is to regulate the classification of controlled drugs in New Zealand and to establish offences and penalties relating to drugs that are illicit. This Act comprises of four schedules which are further subdivided into 13 categories that list the controlled drugs and the precursor substances. The drugs are classified based on the degree of harm caused by them.

Answer (a)

The Act has laid down many offences that can affect an organization operating the pharmaceutical industry largely. One of such offences has been elaborated below.

As per Section 12A (1) of Misuse of Drugs Act, 1975, a person is considered an offender of the provisions of the Act if produces, supplies or manufactures the following:

• any material or equipment that can be utilized in or for the commission of an offence against Section 6(1)(b) or Section 9;
• any precursor substance

With the knowledge of the fact, material equipment or substance will be used in or for the purpose of commission of an offence against the said provision.

As per Section 12A (2) of Misuse of Drugs Act, 1975, Every person who has in possession:

• any material or equipment then can be utilized in or for the commission of an offence against Section 6(1)(b) or Section 9;
• any precursor substance

With the knowledge of the fact material equipment or substance will be used in or for the purpose of commission of an offence against the said provision.

When an offender convicted on indictment for an offence mentioned in subsection (1) of Sec 12A of the Misuse of Drugs Act, 1975, and then every person would be subject to an imprisonment for a term, which shall not exceed 7 years. However, if subsection 2 of 12A of Misuse of Drugs Act, 1975 has been violated then every person would be subject to imprisonment for a term, which shall not exceed 5 years.  Moreover, if the offender is summarily convicted against this section, then the person may be subject to imprisonment which shall not exceed 1 year or a fine which shall not exceed  $1000, or both and the sentencing limits as contained  in section 7 of the Summary Proceedings Act 1957 would not be applicable.

 (ii) The provisions of Section 12A of this Act gets attracted when any organization that is involved in the pharmaceutical industry produces, manufactures or supplies or possesses any material or equipment that can be used in or for the commission of an offence against Section 6(1)(b) or Section 9 of the Act or any precursor substance. When an offender convicted on indictment for an offence mentioned in subsection (1) of Sec 12A of the Misuse of Drugs Act, 1975, and then every person would be subject to an imprisonment for a term, which shall not exceed 7 years. However, if subsection 2 of 12A of Misuse of Drugs Act, 1975 has been violated then every person would be subject to imprisonment for a term, which shall not exceed 5 years.  Moreover, if the offender is summarily convicted against this section, then the person may be subject to imprisonment which shall not exceed 1 year or a fine which shall not exceed  $1000, or both and the sentencing limits as contained  in section 7 of the Summary Proceedings Act 1957 would not be applicable.

a. Criminal law

(iii) When a person commits an offence as mentioned in 12A of Misuse of Drugs Act 1975, he is liable to be prosecuted by the District Court.

(iv) Any person, against whom any prosecution has been executed under Section 12A of Misuse of Drugs Act, can be punished only if the charges of offence are proved. Hence it needs to be proved by presenting adequate evidences that the entity on which the charges are levied, was actually involved in producing or supplying or manufacturing or was in possession of material or equipment that is capable of being used in committing any offence against Section 6(1)(b) or Section 9 or any precursor substance. In case adequate evidences proving the same are not produced, it shall be deemed that the entity never was or is involved in any of the activities mentioned in Section 12A.

(v) If the business deals in any of the below mentioned drugs then it would be sufficient to prove the offence.

• Import or export of any controlled drug, other than the drug mentioned in Part 6 of Schedule 3 to the Act.
• Production or manufacturing any controlled drug.
• Supplying, Administering, offering to supply or administer a Class A, or Class B controlled drug to any other person or deal in such controlled drugs.
• Supplying, Administering, offering to supply or administer a Class C controlled drug to a person who is less than 18 years.
• Selling, offering to sell a Class C controlled drug to a person who is above 18 years of age
• Keeping possession of any controlled drug for purposes set out in paragraphs ( c), (d) or (e) of this subsection.

(vi) The Criminal Standard of Proof means beyond reasonable doubt. It is rigid and need to be strictly followed throughout the common law jurisdictions. Neither the standard nor the required evidence can fluctuate. This is due to the seriousness of the criminal matters and the need to protect the accused and in particular protection of the innocent from conviction. These proceedings are also required for civil contempt because there is a risk of imprisonment.

(vii) A person who is convicted of the offence mentioned in 12A of the Act shall be punished as follows:

• If the person is involved in any offence relating to production, manufacturing and supply of the items set out in 12A of the Act, then he shall be liable to imprisonment for a term not exceeding 7 years.
• If the person is involved in any offence, relating to the possession of the items set out in 12A of the Act, and then he shall be liable to imprisonment for a term not exceeding 5 years.

Answer (b)

• An example of private civil law that is applicable to the chosen pharmaceutical business is Section 207Y of the Companies Act, 1993, that is infringement offences. This is because pharmaceuticals business involves lot of research and involves lot of patents and trademarks, when a competitor gets an access to any such research documents; it modifies it and brings out its own drug. This is the reason why this section is applicable to this business.
• Private law is a part of civil law. Civil Law on the other hand is anything which us not criminal in nature. That part of the civil law deals with the relationships between the individuals like the law of contracts or torts.
• The provisions of section 207Y of the Companies Act, 1993 are applicable to the chosen pharmaceutical business.  This provision would be applicable if the pharmaceutical business has committed an infringement offence. This can be proven by examining the research documents of the infringed drug, the results of the tests conducted before marketing the drug, the approval from the relevant authority that it is safe and can be use for human administration.
• Civil Standard of Proof is commonly known to require facts to be proven on the balance of probabilities and shown as more probable than not. However, this standard can be applied flexibly because the court will take into account the seriousness of the alleged act or the conduct and the potential consequences to the defendant if it proven, when determining whether or not the standard has been reached. However, when the proceedings involve grave matters the court would require stronger evidences before it is satisfied about reaching the civil standard of proof.
• If the plaintiff is successful in proving his point with sufficient and adequate evidences then, the court shall award the plaintiff with such amount of compensation as the court deems fit. Further the respondent may also be directed by the court to pay the plaintiff with the legal expenses incurred by the plaintiff.

Answer (c)

The Treaty of Waitangi is the agreement which was signed by the representatives of Queen of England and the leaders of most of the Maori tribe when the British 1^st claimed New Zealand as a colony way back in the year 1840. In the Northland, the settlement of Waitangi is still the main focus of the events when New Zealand celebrated the signing of the treaty with national holiday on the 6^th of February every year. The treaty is important for the country as it governs the relationship between the indigenous people, Maori and everyone else and it ensures that the rights of the Maori and Pakeha are protected.

The Principles of the Treaty of Waitangi is referred to in various Acts of the Parliament. It is an extremely important part of the working style of the New Zealanders and the education system of New Zealand. The treaty of Waitangi is considered as the founding document of New Zealand. The treaty of Waitangi is now not considered as a part of domestic law in New Zealand. And are often referred for Land cases 1987, Fisheries Act 1983, Ngai Tahu Report, other court cases and so on. However, there is an exception to this; the treaty is referred when its principles are referred to in the Acts of the Parliament.  

b. Civil Law

Answer (a)

There are several steps that a bill has to pass before becoming an Act of the Parliament. Each step ensures that the bill is made a subject of public debate and scrutiny. The steps are as follows-

• Introduction- This is an administrative step which is later on announced in the House. This step gives the bill its formal existence. The bill is made publicly available after this step.
• First reading- In this step, the bill is read in the House for the first time. After this the House commences the debate on this bill and various inputs are taken from the results of the debate. The debate takes place no sooner than the 3^rdday of sitting after the introduction of the bill. This delay would help the members of the house in understanding the bill and decide whether they agree with it or not.
• Select Committee- After the bill is referred to the select committee, the select committee has about 6 months time to carefully assess the bill and prepare a report for the House. The select committee invites the opinion of the public in the form of submissions. After this the committee hears the opinion of the people who made the submissions. It then assesses the opinion of the public and decides about the changes required to be made in the bill which is then sent for a second reading at the House.
• Second Reading- In this step, the select committee reports on the bill. The report can be read not earlier then the 3^rdsitting in the House. Members of the house now debate on the main principles of the bill and the changes (if any) made by the committee in its report. The changes which are not supported by the members are subjected to voting in the house, whereas the changes supported by the members are automatically added in the voting of the member of the house. If the vote is lost, it marks the end of the bill.
• Committee of the Whole House- In this step, all the member of the house participate in the debate of the bill to be passed. Here the members sit in the chamber but the speaker does not take his chair. It is an informal debate on the bill. The members here can make short speeches and debates on the provisions of the bill. There is no time limit on these types of debates. Once the bill takes the agreed final form, it is printed again to highlight the changes made so that it can be sent for a third reading.
• Third Reading- Here, the debate is usually to sum up the debate so that the bill can take its final form. After the debate is over, a final voting is done to pass or reject the bill. However, bills rarely get rejected after reaching this step. If the bill is passed it goes for Royal Assent to make the bill a law.
• Royal Assent- A bill needs the signature of the Sovereign or the Sovereign Representative in New Zealand and the Governor General. After the signature is received it becomes a law which would come into existence at a given date as decided by them.

Answer (b)

The Bill currently in the House and that could apply to the Business is the Misuse of Drugs (Medicinal Cannabis Approval) Amendment Bill.

(i). The purpose of the Bill is to provide easy access to a Cannabis preparation which is required by the patients suffering from Terminal Illness or patients suffering from a condition in which they bear significant pain. This bill inserts a new section 8A in the Misuse of Drugs Act 1975. This is inserted so that the Minister does not prevent the supply and administration of the Cannabis Preparations to a patient considered to by a registered practitioner.

(ii). The Parliament of New Zealand considers various types of Bills. They are – Government Bills, Members’ Bills, Local Bills and Private Bills.

• Government Bills- the Government of New Zealand have a law making programme so that it can act on the policies made by them. As a part of the Programmes, Government Bills are made for the Ministers so that they can be introduced to the House. The order to consider the bill is decided by the Government.
• Members’ Bills- These Bills are forwarded by members who are not Government Ministers and are not a part of the Government’s Programme. These are called Members’ Bill. Very few members’ bills become laws; however they may affect the law making priorities of the Government.
• Local Bills- These Bills are forwarded by the local authorities to deal with the specific issues in their respective areas. The local member of the Parliament is more likely to be the member-in-charge for the local bill.
• Private Bills- These bills are very rare. They are meant to change the law for the benefit of a particular group or person. They may or may not relate to the personal or business activities. The Promoter of the private bills asks the member of the Parliament to take control of the bill as it passes through the house.

The Misuse of Drugs (Medicinal Cannabis Approval) Amendment Bill is a Members’ Bill.

(iii). The Bills is a Members Bill with Hon Damien O’Connor as the Member in Charge of the Bill. It is in the 51^st Parliament with 119 members.

(iv). The Bill is in the Introduction stage. It will have to go the first reading, select committee, second reading, committee of the whole house, third reading and the royal assent before it is passed as a law. It will take a lot of time before it is made a law.

Answer (c)

(i). Delegated (or subsidiary or subordinate) legislation are those laws which are made by the person(s) or the bodies whom the parliament has delegated the law making authority. The Authority is provided by the parent act of the parliament, known as the enabling act. This creates structure of law which then delegates the powers to the other person or body to make a more comprehensive law in that area. Statutory Rules and Regulations are the most common types of a delegated legislation. These legislations are made by the executives or the ministers and will apply to the general population. There are 3 different types of delegated legislation. They are –

• Orders in Council- the Privy Council have the authority to make the orders in the council. The Privy Council comprises of the Prime Minister and the other leading members of the government. This type of legislation allows the government to make the legislation without having to go through the process of passing the bill in Parliament.
• Statutory Instruments- These refer to rules and the regulations which are made by the ministers in the government. They are provided with the power to make the regulations for the areas coming under their jurisdiction. The Statutory Instruments are a major method for making the law as there are approximately 3000 instruments that are made applicable every year.
• By-laws- These are laws which are made by the local authorities to cover the matters falling within their jurisdiction. By-laws can also be made by the public corporations and some companies for specific matters under their jurisdiction which involves the general public at large.

The Delegated Legislation may be controlled and can also be challenged in the court of law if the law so made is ultra vires, that is to say, the law goes beyond its powers which are given by the enabling act of the parliament.

c. Treaty of Waitangi

(ii). There are various by-laws which are a type of delegated legislation which applies to pharma business in New Zealand. One such by-law is the restriction on the supply of the Cannabis Preparations for patients suffering from terminal illness and patients suffering from a condition they have to bear significant pain.  This is applied due to various hazards that can prove to be fatal if the preparations are misused or carelessly handled.

(iii). The Medicines Act 1981, the Medicines Regulations 1984, the Medicine New Zealand (MNZ) code of practice empowers the levy of such by-law.

(iv). An amendment in the law is under discussion at the 51^st Parliament of New Zealand. When this bill is passed after due consideration of all the aspects then the patients with terminal illness will not have to bear the pain. The Cannabis Preparation would help in curing the patients with terminal illness and the patients who are suffering from conditions in which they have to bear a significant pain. This would not only benefit the patients but also benefit the Pharma business because this preparation could then be supplied to all the areas in New Zealand and also can be exported to other countries or the formulae for the preparation can be shared with the other pharma company so that they can earn royalty from that. This would help earn more revenue and even higher profits because of increased demand for the medicine which till now was not easily available.

Answer (a)

Subsection 2 of the Commerce Act 1986 is applicable in respect of the contract or arrangement that is entered into or an understanding before or after the commencement of this Act. It is noteworthy to denote that there shall be no provision application that are most likely to have an impact on the substantiality lessening of competition in the market which is enforceable.

As held in the case of Munn v Illionis 1877 the state control rail road monopolies were upheld by the supreme court. State regulations and commissions was proved to be ineffective and was even declared corrupt.  

The investigator and the enforce department action by the Commerce Commission under the Commerce Act 1986 is usually related to the behavior of large business operators. However, the incident at Trade Me seller can be treated as the reminder to all business people to consider the restriction of Commerce Act 1986. The major purpose of the act is to promote the competition in markets for the long-term benefit of customers. This act is designed to protect that competition by restricting three different type of anti-competitive conduct. In the context of Trade Me seller, the commission received a complaint that the organization had e-mailed a competitor that they should both agree to sell LED bicycle light at a particular set price. According to the complaint, instead of discounting the lights, both the seller agreed to one price.

d. Constitution

However, the other seller did not respond to e-email but Commission examined the issue based on the ground that it could amount to attempt price-fixing. In the end, the Commission issued a formal warning to the seller as well as did not seek any further enforcement action. The Commission has further highlighted the fact that Act permits the court to order payment of penalty, even where there has just been an attempt to break the restrictive trade practices. 

Answer (b)

The meaning of the legislation is interpreted by the court by ascertaining the meaning of the enactment, which must be understood from the text and in respect of the light of the purpose. Section 5 of the Interpretation Act 1999 states down that the matters might be considered in determining the meaning of the enactment that comprises of the indications that is provided in the enactment. The enactment of section 5 of the Interpretation Act 1999 is applicable to the circumstances as and when they originate and the enactment does not have any retrospective effect. The section 5 of the Interpretation Act 1999 also lays down that the form is not valid just due to matter it contains on the slight differences from a prescribed form as long as the form had the identical effect and it is not misleading.    

Answer (c)

Section 5 of the enactment act 1999 states the principles along with the rules for the interpretation of legislation and to shorten the legislation. The Interpretation Act 1999 in the current business context helps in promoting consistency in the language and form of legislation.

Section 5 helps in exercising the power if it becomes necessary or desirable to bring or they are in connection for brining the enactment into the operation. The power can be used in the present business context for removing and suspending the person from the office and reappointing and reinstating the person to the office given the circumstances that the person has already vacated the office or has passed away or is not present.

The above-mentioned incident helps to identify that breaching of laws can lead to serious consequence. In fact, it could permanently suspend the traders in the market. Thus, in the case of pharmaceutical organization, regulatory actions are stringent than other business context. In the coming future, the pharmaceutical organizations might have to face the challenge of challenge of rationale prescribing decision. In the recent time, the health department and regulatory bodies of the nations have asked to improve the rationale prescribing decision that need to be enhanced by the quality of interaction between the healthcare provider and the pharmaceutical organization that manufacture and develop the medicines.

Part B

(a) Central London Property Trust Ltd v High Trees House Ltd is a case where a promise was made that was intended to establish the legal relations and the knowledge of the person making the promise. Concerning the facts of this case to ameliorate the circumstances, the parties to the agreement in writing wanted to lower the rent to half of the amount. However, neither of the party stipulated the period for which the lower amount of rent would apply. Over the period of next five years, high trees paid down the lowered rate which led the flats to fill and they were back to full occupancy.  

(b) under the system of law a precedent can be defined as the authority or a rule that is established in the previous legal cases which is either binding or persuasive for the court or other tribunal at the time of deciding the subsequent cases having identical issues or facts. On the basis of the previous judgments in Hughes v Metropolitan Railway Co the judge held that the entire rent was payable from the time where the flats became entirely occupied. The judge continued the statement that if central London had attempted to claim the entire amount of rent from 1940 became the precedent in this case.     

(c) The Supreme Court sits at the apex of the apex of the New Zealand court hierarchy as the ultimate court of appellate. Cases might also go to the Supreme Court if it provides a leave to appeal. In general hears appeals that are of considerable public interest, commercial significance, substantial injustices or any other significant issues associated with Treaty of Waitangi. The Chief justice presides over the supreme court and they are described in Judicature act in the form of the head of the judiciary. The high court and the Court of Appeal form the subordinate appellate courts. The family court and the youth court are specialist divisions of the district court. Other kinds of specialist court comprise of the employment court; the environment court, Moari Land court, the Maori Appellate Court and disputes tribunals that are smaller claim courts.

In the present scenario, the case was persuasive since it created a doctrine of promissory estoppels.

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