Foss Craig: Companies and Limited Partnerships Amendment Bill — In CommitteeText is incorporated into the Bound VolumeFoss Craig: Companies and Limited Partnerships Amendment Bill — In Committee[Sitting date: 18 June 2014. Volume:699;Page:18660. Text is incorporated into the Bound Volume.]Hon CRAIG FOSS (Minister of Commerce):I will pick up from where we left off last time. Mr Parker had raised a few questions and I will just quickly address those. Someone else raised a question about the size of Supplementary Order Paper 465 and I pointed out that Supplementary Order Paper 465 is not quite just a stand-alone Supplementary Order Paper; it is a revision-tracked version of the Companies and Limited Partnerships Amendment Bill including the Supplementary Order Paper. So essentially Supplementary Order Paper 465 is the new bill. I think one member was trying to measure it by weight or something somewhat naively. Mr Parker was asking about section 135 of the Companies Act. He was concerned about that last time. I pointed out that the criminalisation in section 135 has in fact been removed and that was the part he picked up on. But of course that was a stand-alone offence and it has now been included as a new offence under section 380 of the Companies Act. The serious misconduct that will be caught is the director dishonestly incurring debt for a company when their company is insolvent or the director knew the company would become insolvent.That kind of goes to the crux of the only issue really. The Commerce Committee in its own commentary was wrestling with how to deal with the level or the measurement of criminality of directors’ behaviour and how it should be described and captured. As you can see in that Supplementary Order Paper we have landed in I think a relatively good space. Regardless of whatever definitions came about of course there were questions such as: what if a company was facing difficulty and then some reckless trading issues started to arise because directors were making decisions on a company’s circumstances where on one interpretation they could have been behaving recklessly and therefore facing some criminal issues or in fact they were behaving as their shareholders would have expected and trying to make decisions to trade or build their way out of whatever the circumstances were? And of course there is a distinction on a balance or a measurement of the risk involved when a director directors or a board are making such decisions regardless of how the company got into the position that it may have found itself in. So there was a lot of discussion and as I say that is where Supplementary Order Paper 465 has landed. We really landed in a place where looking at dishonest actions with intent is the area that the criminality side of things here addresses.As another speaker spoke about last time an issue is the expression of potential effect on the entrepreneurship or the willingness of directors to be directors full stop. That was a fair comment. Again the committee I think did a really good job in grappling with that amongst the other issues it dealt with. All parties from whatever side of the spectrum could actually see the issues that the committee was trying to deal with. I am confident that we have come to a place of balance even though we have almost come full circle about good faith now into bad faith and what that means for a company’s circumstances under this new Companies and Limited Partnerships Amendment Bill. I am very comfortable and again I thank the Commerce Committee for the hard work it did dealing with some pretty complex issues.I do note that in previous readings this bill has passed unanimously I think across the House and that is fantastic. It is a credit to the select committee’s work. It is also a credit to the ongoing consultation and ownership that these commerce bills and now Acts have. I asked that officials engage with the various sectors so there was strong ownership of the bills once they landed and turned into Acts. It might take a bit longer to get that process through but when it lands across the House we tend to have pretty good support.