Webb DuncanDr DUNCAN WEBB (Labour—Christchurch Central): Thank you Madam Deputy Speaker. I'm very glad we're supporting this bill to give clarity to the law. I know the Companies Act is an incredibly detailed and complex piece of legislation. I'm not entirely sure that this is the most complex part of the Act or the piece that most needs reform but nevertheless the lawyers seem to have won here—they have managed to convince us that there's some lack of clarity.So we do have here in the Act in section 36 a very clear statement that a share gives an equal right to a dividend as authorised by the board and then says in section 36(2) Subject to section 53 the rights specified [above] may be negated". Then we can go to section 53(2) and what does it say? That "The board of a company must not authorise a dividend—(a) in respect of some but not all the shares in a class;".Now I've dealt with companies from time to time in a prior life and I've seen plenty of shares that carry dividends or don't or carry differential dividends or carry voting rights—preferential shares have different privileges on liquidation and so on and so forth. One of the great wonders of the practice of law is seeing all of the different frameworks that commercial lawyers in their dark little corners of the office can dream up. I see that somehow they've managed to cast doubt on this area and they have persuaded the member Todd Muller that clarification is needed. Well good on him for standing up for his constituency in the Bay of Plenty and I know he's got a lot of really fantastic companies there—Zespri is a classic example and other cooperative companies—that understandably want to have divisions and classes of shares and I think that's a great thing. So look if this helps people to structure their transactions I'm absolutely all for that. One of the really important things we need to make sure that the Companies Act does is give flexibility for people to enter into the business arrangements that are right for them. The great thing about company law and this Companies Act which has been around for some two decades or so now is that it is intended to give that flexibility so that people can enter into all kinds of arrangements through the constitution and can opt out of these default rules—such as the rule that all shares carry an equal dividend—and frame it themselves. So look if this bill goes down that road and says to people "Yes we just want to make it absolutely clear that you can enter into a transaction that steps out of this presumptive rule." that's a good thing so I congratulate the member on approaching it in that way.Of course these are cooperative companies: companies that use an innovative framework where all of the members are part of the business like the fertiliser companies—like Ravensdown—and like other companies that enter into these cooperative arrangements. I entirely endorse what they're doing. The idea of being a common enterprise a joint enterprise is great. If this bill helps them along that road—where it isn't necessarily owned by a foreign shareholder or by someone who's got all of the capital but by the people who are actually working in the business—I absolutely endorse it.I do think in some ways that this is a solution looking for a problem that the problem here is not one of the larger ones facing the agriculture industry but I take it from the member that his constituency has said that it needs addressing. In that case I congratulate him for taking the baton for taking his chance in the ballot for using that chance for what he sees as deserving and for forwarding it in that sense.So look here we have it. This bill will clarify this rule beyond all doubt and that's got to be a good thing. So I hope having clarified this we won't need to go searching for lawyers' opinions and those dividends will be able to be used on the farm and not on lawyers' BMWs."