Partnership Law Bill

on behalf of the Attorney-General: I move, That the Partnership Law Bill be now read a second time.

This particular bill—sorry, I’ll just get my position right here; it always helps to stand on two feet when you speak. The bill re-enacts—

💬 SPEAKER: It could have been a case of severe loss if the member continued.

The bill re-enacts the Partnership Act 1908 in contemporary language, style, and format to make the law more accessible without changing its substantive legal effect.

We are making sure that this particular bill is fit for purpose. Its language, of course, is all important as it’s a significant part of the way the bill is interpreted. The bill differs from an ordinary Government bill because, as a revision bill, it is subject to the revision requirements and powers in the Legislation Act 2012. It does not change the effect of the law except in very limited ways that are permitted under the revision powers, and a streamlined parliamentary process applies under the House’s Standing Orders.

The Law Commission commented several years ago on the untidy state of our legislation, which it said may be the most important part of our legal infrastructure. The commission recommended systematic revision to modernise our Acts and get them into a more coherent state. It noted that the last revision exercise had been undertaken in 1908. The previous Government adopted that recommendation, and this Government has committed to continuing this work to maintain our Acts to make them more accessible. Updating the presentation of our older or heavily amended Acts by rewriting them in clear plain language will make them easier to understand and to follow. The New Zealand Productivity Commission has noted that revision will help reduce regulatory costs for business. An up-to-date Act also makes any future law reform work easier.

The Partnership Act 1908 was an obvious choice for the revision programme because its language and style dated back to the 19th century. The 1908 Act is almost identical to the UK’s Partnership Act 1890. The Act clearly needed updating. There are many small to large partnership businesses in New Zealand. A partnership is an attractive way to structure a business because the partnership form offers simplicity and flexibility. The UK Law Commission has noted that partnership is a form of great antiquity, and, to cite an academic, “Historically, it has a traceable course from the ancient civilisations of Mesopotamia”.

I’ll stop there. It’s quite clear that this particular bill is important, but we just want to make sure that as we embark on this important agenda to update our legislation we do so with this bill. I commend it to the House.

Thank you, sir. I’m back—“back again”, as the song goes.

💬 SPEAKER: It sounds like an old girlfriend, but anyway keep going.

I couldn’t possibly comment.

The Partnership Law Bill—I suppose the first and most obvious question is what kind of partnership it is that we’re talking about. There are a few different meanings of that word. There’s the general sense of a partnership—working together, I suppose we could say. There’s the sense of a partnership in the relationship sense of the phrase—a legal entity, a particular legal entity, can be a partnership—and, of course, the most important definition is the cricketing type of partnership, referring to a number of runs or a period of time, etc., that two batsmen—or batters, I suppose we could say—have been together.

Disappointingly, I’m going to focus on the aspect that is the legal entity, if only because that’s the subject of the bill. As the Minister—or a Minister, at least—has said in relation to the bill, it’s an exercise in updating. So it’s, essentially, re-enacting that statute from 1908 that’s currently on our books and has been added to and taken away, no doubt, in piecemeal fashion perhaps, as is the case with a lot of legislation that dates back to over a century ago. And so, as the Minister of Civil Defence has said, there’s a certain amount of revision, omitting of redundant and spent provisions, changes in language, format, and punctuation, and so forth.

I don’t propose to go through all those, but perhaps by way of example to illustrate the kinds of changes that have been made—and I think worthily—the first note that I’ll make, as referred to in the bill itself within the general policy statement, relates to the word “retirement”. The way that this has been interpreted over the years includes partners who have been expelled or compulsorily retired. So the update that we are now engaged in makes it clear that more general circumstances are implied by the phrase “leaving the firm”. So that’s one of the changes that is being made by this legislation, which—I should pause and go no further before explaining—we on this side of the House do support.

Another change—or another category of change, really, of which there is one example that I will give—relates to the phrase “partnership agreement”. Elsewhere in the Act, but in a similar place, we see “partnership contract”. The difference between an agreement and a contract is not one of any significance. It’s not an important distinction at all. So it’s slightly anomalous that the law would have two different phrases to mean, essentially, the same thing. In interpreting statutes it might be that lawyers or the courts or partners themselves might wonder if there is a meaningful distinction being made there. That’s not intended. And so it is that it’s a worthwhile thing for this House to turn its mind to simply aligning those and making them, essentially, the same thing throughout the course of the one Act. Other examples include trust money versus trust property.

And then one other one I’ll give is a reference to books. The bill itself refers to the reference of books as being archaic. It is a slightly sad thing, I think, even in 2019, that books might be referred to as archaic, but in the sense of accounting and record keeping for an entity it is probably unrealistic, I must concede, that we would have physical books that must be kept on location at the place of business of the partnership. Of course, there are a lot of ways of storing records, which is the language that is being shifted to, so we talk now about records being reasonably available. So they might be “in the cloud”, as the young people say, or otherwise available than as physical books on the—

💬 Fletcher Tabuteau: Oh, you can say it too. It’s OK.

I think I’m being heckled by some young people—or rather he might wish that were so.

But actually one more, because I can’t resist—one more: so “servant” has been updated to “employee”. “Servant” obviously has a slightly archaic and perhaps even slightly uncomfortable class-based notion. It has a particular legal meaning, so we needn’t get too caught up in that.

Then the bill itself, in making all those changes, retains a similar kind of structure, as you’d expect. It talks about the nature of partnership. It explains that it’s a relationship that exists between persons who carry on a business in common with a view to profit. So there are a number of different entities that we can say that it’s not. The short version would be that a partnership is not a company, which leads to the irresistible conclusion that a company is not a partnership. That doesn’t get us very much further along, so I can only commend anyone who is particularly interested in the provisions to read the bill itself. On that note, I shall commend on behalf of the National Party this bill to the House.

Tēnā koe, Mr Speaker. I’m pleased to take a call on the Partnership Law Bill and follow the member that just resumed his seat, Chris Penk, as a fellow member of the Justice Committee, and just to make note that this bill was both reported, I guess, to the House prior to my joining the select committee, but nonetheless I want to recognise the work of the Minister that presented this bill, David Parker. It’s part of his revision programme, as he informed us all last year, and, like the previous speaker said, there’s nothing controversial in this particular revision bill. It really is attending to what my colleague the Hon Peeni Henare started to say—the modernising of the actual bill.

By revising or modernising it, we basically are suggesting the areas that need addressing, because remember the last time this particular Partnership Act was revised was back in 1908. The rules in the 1908 Act define what a business partnership is and govern the rights and obligations that exist between partners and with third parties and also provide for the end of partnerships. Those were the kinds of rules back in 1908, so to improve the access to those rules and modernising them, this bill attempts to do it by reducing the inconsistency and the overlap in terms of the 1908 provisions. It also arranges the provisions’ logical order. Again, I mentioned earlier that it changes language format so we’re using contemporary language not 1908. When I think about 1908, the country was severely different to what it looks like in 2019. So it makes sense that punctuality and formality are clear. Of course, the Speaker wouldn’t have known what it was like in 1908, but we could all picture our great-grandparents, perhaps. Of course we want to use gender-neutral, so this bill is addressing the use of gender terms and terminology and modern styles of expression. The bill also is using current drafting styles and formats to better express the spirit and meaning of the law, and it removes spent or repealed provisions.

So the bill, like I said, attempts to modernise it. There’s clearly no change in policy. Though the select committee themselves did not receive any submissions, the report that got tabled back to the House by the Justice Committee—albeit one-and-a-bit pages—did note that they flagged some future work in the examination of this bill. I’m hoping that somebody that was on that particular select committee—they didn’t feel it was important to raise it in the report back, but I’m really quite keen to hear what was some of the future work that they flagged in their full report back to the House. I’d just be interested, because it’d be interesting to see whether the Minister is picking this up as part of his wider revision programme. But I think, if we are going to modernise any legislation in this House, then we want to capture at the time that we’re doing. So it’s just a question I have as the chair of the select committee to those that were around at the time. If they want to take a call, I’d be keen to know what those outstanding issues were.

But what’s interesting—and part of our scrutiny of any pieces of law in this House is to give assurances to the House and to the public that when we say there’s no policy shifts, we’re giving a cast-iron guarantee that there are no policy shifts or wider implications with this change. I just want to note for the House that this particular bill went through some amazing checks and balances to ensure that it was consistent with current law and purely only about modernising language.

So I want to acknowledge the Parliamentary Counsel Office (PCO) and the Ministry of Business, Innovation and Employment in terms of their consultation with public and some interest groups on this exposure draft—an exposure draft of this bill was made available in 2018 and it was taken out to selective interest groups. We had three submissions from lawyers who helped prepare the bill for introduction. That was published on PCO’s website. We also had four lawyers appointed under the Legislation Act certify that the statutory revision powers were exercised appropriately and that the bill does not change the effect of the law. But in our assurances that we are making sure that there are no legislative changes, we then had the bill certified. We got it certified by the retired High Court judge the Hon John Priestley QC. We had the President of the Law Commission, the Hon Sir Douglas White QC, and the Solicitor-General, Mrs Una Jagose QC—apologies if I’ve mispronounced her name—and the Chief Parliamentary Counsel herself, Ms Fiona Leonard.

So not only did we take it out to interested parties as a process, but we also had this very, very high-level certification by retired or existing QCs and High Court judges to give the House and the public that guarantee that when we say there are no wider changes other than the modernisation of language, I think, that test and the level of the test that’s been applied to this bill should give us comfort in this House. It certainly gives me, as the chair of the Justice Committee, comfort that all the belts and braces have been applied to ensure that when we say there are no wider changes or policy changes in this piece of law, then we can guarantee with those levels of scrutiny that have gone on previous to it.

So I want to also acknowledge that the bill comes into force six months after enactment, which gives businesses and partnerships the opportunity to make the necessary changes should they wish. There isn’t anything major in this bill that they have to do. There is alignment to the existing legislation and what’s proposed here. So there’s no panic to any business partnerships out there. This is really just doing what I think a lot of businesses will understand around streamlining the process. So it is a bill I’m pleased to stand and support in terms of what’s being laid out by my colleague the Hon Peeni Henare in terms of what the bill’s intending to do. I want to commend the work of the select committee in considering it and those fine people that were used to test and check the belts and braces on this particular bill, and I commend it to the House.

Thank you, Mr Speaker. It’s my pleasure to stand in support of this Partnership Law Bill. The previous speaker, the Hon Meka Whaitiri, chair of the Justice Committee, explained it very well. This bill doesn’t make substantive change to the effect of the current law but makes minor changes to ensure it is modernised and up to date. This Act is more than 110 years old, and I would like to acknowledge the Hon Meka Whaitiri for taking eight minutes to explain the whole thing. The Minister Peeni Henare wrapped up in three minutes, so she has done very well. I acknowledge your insight about it, even though you were not the chair of the Justice Committee at that time.

💬 Hon Meka Whaitiri: I wasn’t even on it.

Yeah, but still, you have got a very good insight of the bill. So there’s nothing much to add because there are minor changes in this bill. I commend this bill to the House.

Very good. The question—

Oh, Mr Speaker. No, Mr Speaker—may I have a turn?

💬 SPEAKER: Oh, Fletcher Tabuteau. You’ve got the call.

Thank you very much, Sir.

💬 SPEAKER: You don’t have to use it.

No—I would very much love to use it. Ha, ha!

This evening’s legislation, with regards to the Partnership Law Bill, is pretty much just a simple indication of a Government and a Minister that are doing things in the right space at the right time. As previous speakers have acknowledged—

💬 Simeon Brown: It’s 111 years late.

—it’s simply about tidying things up. The Opposition member from the other side of the House may recollect the 1908 original legislation, but we have to say—

💬 Hon Member: Which one?

That one at the back. Ha, ha! But what we are saying this evening is that this is, essentially, a tidy-up. We have heard from previous speakers about antiquated legislation, antiquated syntax, wording, and phraseology, and that’s not really helpful for modern business, Mr Bidois. I appreciate your look of incredulation there. So what we’re doing, and what the Minister has done, along with our officials, is tidy it up, essentially. Actually, this is an opportune time to acknowledge the work of the select committee in this space, as also noted by previous speakers. This is a tidy-up that needed to be done.

The bill defines a partnership. It establishes what it is, in terms of governing the rights and obligations between partners and third parties. It contains financial reporting requirements for large partnerships and governs what the end of a partnership actually looks like. I think it’s important to note in the House that we have over 60,000 partnerships that are GST-registered in New Zealand, and I think it’s probably fair to comment that not necessarily all partnerships will be GST-registered. So there are many, many more that will be out there that will appreciate the work that has been done in this legislation.

So on behalf of New Zealand First, I wanted to stand up, outline the sensibility of this legislation, the need for it to be undertaken, the appreciation that we have not only of the Minister but of the select committee, and simply congratulate the House on work that is well done. It is not significant, but it is things like this that make business easier to do and undertake, and I think it is work like this incrementally added up that makes a difference. So thank you for my opportunity to speak, Mr Speaker.

Just before I call Dan Bidois, I will say that I have referred to the dictionary and the member has used a new word when he’s put together “incredulous” and “adulation”.

It’s a pleasure to rise and to speak in the second reading of the Partnership Law Bill. I did have to do a double take because the Minister wasn’t sure, I don’t think, about what reading this was in. But, none the less, we’re in the second reading. I’ve learnt a new word tonight, apparently, from the other side of the House. It’s a pleasure to speak in the second reading of this bill.

Partnerships are really important for New Zealand. I’m bringing back a little bit of my commercial law 101 here, but not only partnerships. If you want to set up a business, you can either form a company, form a sole partnership or a sole trader business, or the third option is a partnership, and this law is really about the third option of setting up an enterprise. As was mentioned before, there are over 60,000 of these in New Zealand, so it’s a really important law. It is a law that is a little bit antiquated, and I think this side of the House does look forward to updating it and modernising it—bringing the language into the 21st century, which is what this bill seeks to do.

So there are lots of things that have been traversed today, but, of course, the bill itself is really important. It defines what a partnership is and what a partnership is not. It also defines the nature of partnerships and the responsibilities of partners to a partnership, but also how one goes about establishing or dissolving a partnership throughout the life of the entity. So this is actually a really important law for New Zealand and really important that we modernise it. It doesn’t actually have much in the way of substance in terms of the changes. So I don’t want to labour the point too much beyond that, other than National certainly supports this in the second reading, and I commend this bill to the House.

E Te Māngai, tēnā koe. Tēnā koutou e Te Whare. Madam—Mr Chair—Mr Speaker, I apologise. We’ve had a lot of women in the chair as of late, as I’ve been speaking in this House.

💬 SPEAKER: Not today we haven’t.

CHLÖE SWARBRICK: Not today, no. Interestingly enough, in canvassing exactly how old the Partnership Act 1908 is, I turned to our trusty friend Google. Given that this Act—or rather, sorry, the Partnership Act 1908, which the Partnership Law Bill seeks to amend—is over 110 years, I found out that, actually, on this day in Parliament 110 years ago, women actually didn’t exist in the Chamber. Women weren’t allowed to stand for Parliament until 1919—that being 29 October where we finally secured the right to stand for Parliament—26 years, I might add, after we won the right to vote, which, of course, backs up the point made by my colleague from the National Party Dan Bidois that this is indeed an antiquated piece of legislation which the Partnership Law Bill seeks to amend.

This is, of course, a non-controversial piece of legislation because it is a revision bill that has been backed up by three submissions from lawyers who helped to prepare the bill, and then four lawyers who were appointed under the Legislation Act who certified that the statutory revision powers were exercised appropriately—that being in accordance with revision requirements and powers in the Legislation Act 2012. In the broad sense, this, of course, does not change the law whatsoever—i.e., that being the effect of the law. It does, however, change and update the legislation—that being the language which is used.

Just in closing the Green Party’s contribution in our support of this piece of legislation at its second reading, I just want to make the point that accessibility and transparency are two quite different things. New Zealand Parliament consistently ranks at the top of the charts as one of the best parliaments in the world for transparency’s sake, but there is a difference between having all of that information publicly available and that information being digestible and accessible to everyday people who seek to access that information without necessarily needing the help of lawyers. That is, of course, what the Partnership Law Bill seeks to do in tidying up the Partnership Act 1908 and modernising the language. The Greens commend this bill to the House.

Thank you, Mr Speaker. It’s a pleasure to take a very short call on the Partnership Law Bill and to follow my learned colleague Chlöe Swarbrick from the Green Party. I’m glad that she’s researched this bill in depth, and I have too. It’s a great bill. One of the pieces that it does is it removes some archaic references to “books”. I thought that was a very interesting thing, because it changes it to “records”. Of course, in relationship to businesses, we don’t often talk about going and having a look at the books; it’s what’s in the records, and, of course, nowadays, we’d go and see what’s in the cloud. So in 110 years’ or 111 years’ time, I’m not sure what this Parliament will be doing in keeping the records, but at least it’s in the Hansard that it’s no longer the books or the records; it’s in the cloud. So I commend this bill to the House.

Thank you, Mr Speaker. It’s a great pleasure to follow the members who have just spoken—

💬 SPEAKER: I’m glad someone’s getting pleasure!

—ha, ha!—on such an interesting and thought-provoking bill, especially Mr Chris Penk, my former Justice Committee buddy, rather than member, who raised some interesting but valid points, such as how to define partnership—whether in the business sense or in the context of relationship.

This bill does contain very interesting provisions, such as how to define partnership. For instance—I think it is—Schedule 2 provides a reference to replacing the references in section 20(2) and (3) of the Act from “retiring partner” or “partner who retires” to another reference with regard to a partner who “leaves” a partnership or a firm—so providing a more accurate and easier-to-understand definition.

Overall, as members have raised, this is a revision bill, and this bill does not seek to change the substantive nature of this 1908 legislation; rather, it seeks to modernise the Act. I commend the bill to the House.

Thank you, Mr Speaker. Well, I’ve been a member of this House now for five years, and it’s the first time, other than Treaty settlement legislation, that I’ve spoken on something that actually goes back this far. It just makes sense to support this into a new phase. My grandmother was born in 1916, and she’s still alive at 103 years of age. There are not many things that supersede my grandmother, but this bill does.

So with that—look, obviously, the languages have changed, the systems have changed, and there are a whole lot of things that have happened in the time between 1908 and now, so it is my pleasure to commend this bill to the House. Thank you.

Mr Speaker, I can tell by the look on your face you might be thinking this is going to be a brief call, but partnership is a thing very, very close to my heart—

💬 SPEAKER: Don’t challenge me!

I wouldn’t dare, Mr Speaker. But I just do want to note the passing of this bill, because this bill is one of a tranche drafted by Mackenzie Chalmers. In fact, the whole of the English commercial law was drafted by this fellow back in 1906, and we adopted them holus-bolus—Sale of Goods Act, Bills of Exchange Act—and here we have the last vestige. So it’s actually quite a historic moment to update it and to get rid of language that has lasted, to its credit, for more than 100 years and has served us well. I think parliamentary counsel could actually look back and say, given the time, that was actually a fantastic piece of drafting. Anything that can last that long is actually something that has worked effectively.

Partnerships are critical in New Zealand, and I think it’s worth just noting that if you and I, unlikely though it may seem, Mr Speaker, were to strike up a bargain to go into a joint enterprise—very informal, oral only—the whole force of this law would come and bear on our relationship. That’s a really important thing, because a lot of enterprises, large and small, are based on this law, and to make it accessible so that ordinary business people, who might be just opening up a corner fruit stall, can understand it and can get on with their business with certainty is actually a fantastic thing.

The last thing I was going to say: Minister Peeni Henare, I think, was perhaps worried that you might intervene when he started talking about Mesopotamia, but that was in fact the oldest laws known to us at the moment, the laws of Hammurabi—1754 B.C., had law on trading, mercantile relationships, and partnerships, and here we are bringing it up to date today. What a fantastic day it is. I commend this bill to the House.

Thank you, Mr Speaker. Happy to take a short call on the Partnership Law Bill. If there’s one thing that I always enjoy at 9 o’clock at night, it’s a history lesson from the good doctor Dr Duncan Webb—always makes my night. We’ve had such excellent speeches this evening. I don’t think there’s any more to add, so I won’t prolong this any further. We support this bill, and I commend it to the House.

Bill read a second time.

Third Reading