Muller ToddCOMPANIES (CLARIFICATION OF DIVIDEND RULES IN COMPANIES) AMENDMENT BILLThird ReadingTODD MULLER (National—Bay of Plenty): I move That the Companies (Clarification of Dividend Rules in Companies) Amendment Bill be now read a third time. It is with some disappointment that I seem to be losing the gallery—[Interruption] But this was as it has always been a Parliament of diversity—Hon Gerry Brownlee: I raise a point of order Mr Speaker. You have called it but you've also got the duty of making sure that Parliament is attentive to its business; it's clearly not at the moment. I wonder if we could take a moment to get a settled approach and—SPEAKER: I had tried to get that. I managed to get it on the floor but I will remind people upstairs that Parliament has to get on with the rest of the work. So as well as the lobbies downstairs could people continue their greetings of whatever nature outside rather than in here.TODD MULLER: I was just reflecting on the diversity of the issues that come forward to this House through the members' bills process—some clearly hugely wide reaching; others more narrow and technical and I would be the first to admit that the bill that we are reading now for the third time this evening definitely falls into that third category. But despite it being such a narrow and technical bill it is one of some import for our agricultural businesses that are often structured as companies but that wish to manage their constitution and their affairs in such a way that allows cooperative principles to be maintained.Mr Speaker this bill has a somewhat personal genesis for me—[Deputy Speaker coughs] Madam Speaker sorry; I was unaware caught up as I was in the emotion of this moment that the Chair had changed. My deep apologies.Years ago I had the great privilege to work for Zespri International—Hon Member: For Fonterra.TODD MULLER: No Zespri International based in Tauranga. That business when it was given flight initially by a National Government and in terms of its formation in a corporate context by the then Labour Minister Jim Sutton supported by the rural affairs Minister Damien O'Connor—as that company was being established there was an expectation by the then Labour Government that it was established as a company but had the opportunity to be able to operate should it wish in following cooperative principles.As a number of the Primary Production Committee would now be very aware that was the genesis of my involvement with this particular technical change that we are seeking to hopefully conclude tonight because when that company was established it was established under the Companies Act 1993 but wanted to be able to treat its shareholders with the appropriate cooperative principle of wet shares being able to attract dividends. They are shares that had production that was backing them. The dry shares—those were shares that did not have kiwifruit production backing them—would not attract a dividend. This is the genesis of this bill.Under the Companies Act it is clear that you have two sections which are not in alignment over whether a company can so manage their affairs in that way. You have section 36 which allows a constitution to have that difference and then you have section 53 particularly subsection (2) which a number of legal scholars have said negates that right. This small technical amendment seeks to clear that up that if you are a company that wishes to treat its shareholders in such a manner that dividends can be applied to shares which are backed with production and dividends do not flow with shares that aren't backed by production there is no lack of clarity in the Companies Act legislation with respect to your ability to give effect to that wish. That is all this is.I am very very pleased to have been able to manage this process through with the support of the Primary Production Committee. I acknowledge not only the chair David Bennett but the contributions from across the committee. There have been some very strong contributions from Kiri Allan that I want to acknowledge here tonight. You know obviously we come from different perspectives politically but she is from an area that has some connection with kiwifruit and some companies in particular who have had to traverse this challenge previously and she saw the issue that I was seeking to resolve through the technical challenge. I also want to acknowledge New Zealand First who after some consideration also landed on the position that actually what was being done here was not something in the traditional sort of partisan approach that sometimes occurs in members' bills but actually a simple technical amendment to clarify that if a company wishes to set up their constitution in that manner they can.We had a small number of submitters. They were the co-operative society we also had a submission from Zespri and a particularly helpful one from then QC David Goddard that assisted the committee in understanding the genesis of the Companies Act formation: why the original Companies Act was written as it was the perceived intent around the ability for companies in their constitution to set up as they wish and some of the legal challenge that has emerged over time with respect to section 53.We have gone through a thorough process. We have debated it obviously here a number of times. We have also had a decent discussion at the committee of the whole House where we again tested the premise and landed a view which appeared to have the whole House in support of these minor technical changes.You know as I mentioned as I started this is not a change that is likely to make the front page tomorrow relative to the previous bill alas but for those who are involved in agriculture who wish to set up a company with the flexibilities of the Companies Act and to get some clarity around the tension between these two sections this small bill provides that clarity and finally resolves an issue which has been a stone in the shoe for small agricultural companies that have wished to be structured with this degree of flexibility. I appreciate the support that this appears to have had acknowledge the contributions of all throughout the select committee and look forward to this bill proceeding tonight. Thank you.