Rurawhe AdrianINCORPORATED SOCIETIES BILLThird ReadingDebate resumed from 30 March.DEPUTY SPEAKER: Members we are on call No. 2 and I believe it's a National Party call.Hon Judith Collins: Thank you. Thank you.DEPUTY SPEAKER: Sorry there were members blocking you.Hon JUDITH COLLINS (National—Papakura): Thank you Mr Speaker. We in the National Party support most of this bill but we think that there is a very important issue that the Minister has missed and I hope he will listen to this. We are deeply concerned about clauses 53 and 54 of the bill. These are modelled on sections 135 and 136 of the Companies Act which require directors not to trade in a manner likely to create a substantial risk of serious loss to creditors and not to agree to incur obligations if they do not have reasonable grounds to believe that the company will be able to honour them.Now on the face of it that might sound perfectly fine until we consider that the incorporated societies that we're talking about already have unlimited liability so they're not limited liability like companies they're unlimited. So this is an extra onus on the people who choose to take up—or are often basically strong-armed in many cases to take up—the obligations of being the president the chair the secretary of these incorporated societies because let's be really clear these are people often at the you know Dunholme Tennis Club. This is what we're talking about. This is not talking about businesses where directors are being paid for their time their expertise—and in most cases nowadays directors require some form of directors insurance. So what we're concerned about is that this bill is overdoing it. So there are some really good parts of it. But this particular one we've got real concerns with.We support as I said most of the bill. I mean the bill is trying to modernise what has become in some cases quite a cumbersome situation. But we do believe that these clauses 53 and 54 are designed for corporate structures and they've just been taken holus bolus into this bill which is actually about these incorporated societies. So we really do think this is quite a serious issue.We note also that there were plenty of submissions on the bill and particularly on this issue. In fact the law firm Chapman Tripp has written separately to the Minister to warn him of the significance of including clauses 53 and 54 in this bill and he has chosen not to take that advice. But that is a shame because we also have of course the situation of the Credit Contracts and Consumer Finance Act also from this Minister and we were obviously concerned at that stage that something might go wrong. And gosh it did—we've been straight back into Parliament to try and correct it as banks and lenders feel that they are obliged to check people's coffee consumption before they decide whether or not they're responsible enough to have a mortgage. This is another one of these where it might look OK it might look good on paper but I think we do need to really look at this.So what we're suggesting because we are now in the third reading is that it would be useful if this matter—and the Minister agreed—was brought back for a review to the select committee in say a year's time to see if any of these unintended but possible consequences have actually occurred. I think that that would be a way through for the Minister and for Parliament to be able to do most of—as I say most of this bill we're perfectly happy with but it is of course that unintended consequence. I think as we have seen people do sign up to be the treasurer or the secretary because we have a culture of volunteerism in New Zealand. We're very fortunate. We and other democratic countries tend to have that more than say those countries that were brought up under communism for instance where they don't have volunteerism.Hon Member: Ha ha!Hon JUDITH COLLINS: Well the member laughs about that and I think you know she's quite right to have a giggle about it. But I've actually met with people who came out of that and they came to New Zealand and they found that they didn't understand that people would actually go out and do things just to help others. They lived under a State that said you had to do it and if you didn't have to do it then you didn't do it. So I think we do need to respect that when people join up to these incorporated societies—because we are sort of a joining sort of culture here in New Zealand; we like to join things meet people and be part of things—we need to make sure that we don't make it too difficult for them to do so or too expensive.We have seen those sections in the Companies Act—sections 135 and 136—have quite severe consequences. I'm not saying whether or not those consequences are not deserved in certain cases but it is pretty clear that we don't want to see those same consequences visited upon the incorporated society that owns a tennis club. That is not the sort of thing that we'd be wanting to see—and understanding as well that companies are themselves limited liability companies. So the company of the shareholders is limited—and directors—but if you look at the incorporated society they don't have that protection so actually by just bringing those provisions across from the Companies Act into the Incorporated Societies Act we're actually going to be changing it and putting more burden on the incorporated societies.I don't think that's what Parliament's meaning to do but I think there is a real danger there. And having read the two sections in both the two Acts I can see it is basically a cut and paste and I think it's a cut and paste that we do need to be very careful of having brought this through into that third reading. I say if we can have some response; if the Minister can confirm for instance that the select committee could review this in a year's time say that might be a really good way through. The last thing we want to do is to have people saying I'm really frightened about these responsibilities. I've had my legal advice on it. Why would I put my home at risk for the tennis club?"You know it's just really important that people take this seriously and right at the moment I think we need all the volunteers we possibly can helping to build social cohesion after what we've all been going through with the pandemic and it is really important that people don't feel frightened. As we know many of the people who come and take up those roles are in the—let's say it—more twilight years of their lives and the last thing they want is risk. They certainly can't afford in most cases to purchase insurance for it. They certainly don't want to have that sort of hassle. So I think we just need to make sure that as a Parliament we give that protection. The Minister has been nodding quite a lot which is—sorry the Minister in the chair not that Minister has been nodding quite a lot so I'm hoping he's agreeing with me and whether or not the Minister the Hon David Clark can actually confirm that that would be very helpful. Thank you Mr Speaker."