Companies (Address Information) Amendment Bill

Members, we come now to clause 6. This is the debate on the amendment to section 387A, “Service of documents on directors in legal proceedings”. The question is that clause 6 stand part. Tom Rutherford.

Very good, Mr Chair! Clause 6, “Section 387A amended (Service of documents on directors in legal proceedings)”, says, “After section 387A(1)(b), insert: (ba)”—which is—“by leaving it at the director’s alternative address (as that address is shown in the register);”. My question is: these clauses ensure that alternative addresses can be used for serving legal documents on directors, as we’ve transpired and gone through throughout the debate this evening; how will clause 6 and its amendments to sections 387A—and 388A, which is actually in clause 7, and I’ll speak to when we get to it—affect legal practitioners serving documents on directors? Will there be any hierarchy of service methods or will alternative addresses under these provisions have equal status with residential addresses?

How will legal practitioners know which address to use for service, say, if actually both have been made available—if it is both their private residential address and their alternative address, as we’ve transpired? How would I as, say, a legal practitioner—maybe a chartered accountant that was slandered recently by the Hon Dr Duncan Webb. How will legal practitioners know which address to use for service? If I was said chartered accountant—very upset by comments made by Dr Webb—how would I know which address to use for service? We’ve now enabled both under the changes in this legislation. How would I know which one to go and utilise as their residential address or their alternative address, as with clause 6, “Section 387A amended (Service of documents on directors in legal proceedings)”? Will there be any hierarchy of service methods? Is it that you must go to the property that is listed first in the way it shows on the paper, number one and then number two? What if they’re showing side by side to each other?

It could be alphabetical based on the address; it could be numerical. For example, if one is 1 Butterick Road and then the other one is 2 Andersen’s Drive, how would I know which one to serve the papers on? How—

Steve Abel: Are you serious?

TOM RUTHERFORD: What was that, Steve Abel?

Steve Abel: Are you serious?

TOM RUTHERFORD: Am I serious? I am serious. This is the intention of the committee of the whole House stage: to stand in this House and go line by line through legislation. Fundamentally, this is actually the primary role of members of Parliament. The job of members of Parliament is not to stir up hate in the community, not to incite things to take place. No, their number one job is to come to this place and legislate—legislate—and say, “Have we got the legislation right? Is the clause written correctly? Has the member’s intention been reflected in the legislation?”. For a member of the Green Party to say, “Are you serious?”—am I serious that at 9.25 on a Wednesday night, I’m doing my job? Yes, I am serious. That’s why I got elected: to legislate in this House and to ensure that New Zealand has the best possible legislation moving forward.

Hon Marama Davidson: I’ll send Lawrence over to give you the lesson.

TOM RUTHERFORD: What was that, Marama Davidson?

Hon Marama Davidson: Lawrence will come over and give you the lesson.

TOM RUTHERFORD: He’s welcome to. It’d be a nice change, actually. It’d be very refreshing. He’s the one that actually does the heavy lifting. I’m surprised he hasn’t resigned yet.

CHAIRPERSON (Greg O’Connor): Mr Rutherford, if you want to rewrite the general orders, that’s fine, but, right now, back on the bill.

TOM RUTHERFORD: Point of order?

CHAIRPERSON (Greg O’Connor): Back on the bill. Don’t “point of order” at my decision or you’ll be sitting down.

TOM RUTHERFORD: No, no. I’m—

CHAIRPERSON (Greg O’Connor): You have spent a lot of time talking about what we might do and why we’re here and giving a job description of a backbench MP. That’s not your job. Your job is to talk about this clause—now do it.

TOM RUTHERFORD: OK, I will. Clause 6 is around “Section 387A amended (Service of documents on directors in legal proceedings)”. How will clause 6 affect legal practitioners serving documents on directors, and how will legal practitioners know whether to use the residential address or the alternative address to use for service?

As I have done a number of times before, this evening, I direct the member Tom Rutherford’s attention to the particular section in the Companies Act. Section 387A deals with the service of documents on directors in legal proceedings, and it says, “A document, including a writ, summons, notice, or order, in any legal proceedings involving a director … may be served on the director as follows: (a) by delivery to the director; or (b) by leaving it at the director’s residential address … or (c) by leaving it at the company’s registered office … or (d) by serving it in accordance with any directions as to service … or (e) in accordance with an agreement made with the director; or (f) by serving it at an address for service …”—and so on. There are already a number of methods for delivering documents for service. All this clause does is enable an alternative address to be used as one of the many methods, and lawyers are quite accomplished at delivering those documents already, despite the plethora of methods that are already available to them.

Thank you, Mr Chair. Of course, the problem with this clause is that it contradicts the clause that we just voted on, which prevents a company’s registered office from being the address for service, and, of course, if you’re a director of a company—

Hon Dr Deborah Russell: No, it doesn’t.

Hon JAMES MEAGER: Sorry, Deborah Russell, it does. New section 360E(3), “Requirements for alternative address”, in clause 5, states, “The alternative address of a director or shareholder of a company must not be—(a) the company’s registered office or address for service:”. That’s the clause you just voted on and just passed. Therefore, when we’re looking at this clause, clause 6, which says that says that service of documents on directors in legal proceedings must be done “by leaving it at the director’s alternative address (as that address is shown in the register)”, that alternative address cannot be the company that they work for, which is the legal address of service. There’s a contradiction in terms here. I’m not sure if the member was aware of what we just voted on, but that is the consequence of voting on clause 5 and now moving to clause 6. I think the member needs to have a look at what we’ve just passed and how this clause interacts with that, because it may leave us in quite a tricky situation.

I think my friend Mr Rutherford raised some very valid points on that, and it raises some questions. I think we’ve had a pretty good crack tonight at being quite serious and quite upfront about actually addressing the content before us, and to be heckled about that is quite unacceptable. So if the member is able to address that point, I’m sure we’d really appreciate it.

I just can’t believe the misreading of the law that’s going on there. I’m just going back to clause 6, amending section 387A. It gives a number of different places where documents may be served. If we go back to new section 360E, inserted by clause 5: the alternative address must not be the company’s registered office, but the company’s registered office can still be used for service. It doesn’t stop it being used for service; it’s just that you have an alternative address instead of the residential address. It doesn’t say you cannot use the company’s office for serving documents; it just simply says that the alternative address cannot be the company’s registered office. It needs to be an alternative address.

I think the member is making a mountain out of—it’s not even a molehill; it’s just a blip in his mind somewhere. I think filibustering is all very well, but it should at least have some point.

Mr Chair, I—

Hon James Meager: Point of order.

Dr VANESSA WEENINK: He’s got a point of order.

CHAIRPERSON (Greg O’Connor): Oh, sorry, I missed that. Was that a point of order?

Hon James Meager: I sat down.

Dr VANESSA WEENINK: Well, you know, here we go. I actually thought that we should just take a moment to pause and just very carefully look again at what the Hon James Meager was talking about, because I think he may actually have a point. We need to be very, very careful when we look at the way that it’s actually written.

I’m going back just to make this point about new section 360E: “(1) The alternative address of a director or shareholder … must not be—(a) the company’s registered office or address for service;”, and then it’s got a semicolon and “or” the other thing. It must not be the address for service. In this section, it says: “The alternative address”—blah, blah, blah—“must not be … [either] the company’s registered office or address for service;”, which does contradict, as my learned colleague pointed out, the clause that we are now looking at, clause 6, “Section 387A amended (Service of documents on directors in legal proceedings)”.

It’s actually important that we just clarify and make sure that we haven’t—in all of the addresses and alternative addresses and addresses for service that have been put in here—inadvertently just contradicted the law that we were trying to make, and ensure that, where it says, in new paragraph (ba), “by leaving it at the director’s alternative address (as that address is shown in the register);”—but that previously has said that that must not be the address for service. I think we shouldn’t just brush off this question. I think that it’s actually a very, very important question and a very important point, and I think, at this late hour of the night—it’s 9.30 p.m. on a Wednesday—we risk not taking seriously a point of law that has been very carefully and diligently found by one of my colleagues.

I do take umbrage from across the House at being asked whether we are taking this seriously. We are taking it extremely seriously, Mr Abel. We are going through this with a fine-toothed comb and potentially picking up problems with the way that this has been drafted and making sure that we aren’t actually inadvertently creating contradictions in the law that would then create consternation amongst our legal fraternity in New Zealand, where they would be constantly wondering, “Well, is this allowed to be an alternative address, or is this the address for service? Can we use this alternative address? Why have they said that it must not be an address for service where, at the same time, it then says that they may leave it at the alternative address?”

I think that it really does behove us to be careful, to consider this, and to argue this point until we are absolutely satisfied whether this is a contradiction or not. I think it would be a mistake for us to go in haste through this. We have been accused many times by the Opposition of pushing too fast with law, and here we are being very careful with a piece of law, and being attacked for—

Hon Marama Davidson: No, no, this is poetry—poetry.

Steve Abel: This is great. You’re embarrassing yourself wonderfully.

Dr VANESSA WEENINK: You’re liking my poetry? That is really a wonderful compliment from those members across the House to say that I’m being poetic about all of this, because I’m serious about this, and I think that it would be a real shame if the Hon James Meager’s point was not taken as seriously as I think—

Steve Abel: It’d be good to hear from James again on it.

Dr VANESSA WEENINK: —it actually should be. I think we should—I think you’re right, Mr Abel. I think we should hear from him. I think he probably had more to say. He was thinking about taking a point of order, but he could see that I had a good point to make in support of his very, very important, I think, picking-up of a potential blunder. It’s really, really important that we take this seriously and look into it in as much depth and as much seriousness as possible.

Members will recall the extended discussion we had earlier this evening about why we needed to use “alternative address” rather than “address for service”. An address for service is a place where documents may be served to someone. They can be served in a variety of places, including the company’s address for service. However, a director’s alternative address, which is not the same as an address for service, cannot be the company’s address for service. Straightforward, right? It really, really cannot be. But the alternative address can be used for service, as can the company’s address for service. That’s fine; no worries about that. It’s just that the director cannot use the company’s address for service as their alternative address. So there is no confusion here; there’s a very careful delineation of terms.

More to the point, there are a whole set of places where documents can be served on directors, listed in section 387A of the primary Act. There are a whole lot there that can be used. This is precisely why those two terms have been pulled apart: we have the alternative address and the address for service. So there’s a whole lot of places that can be used to serve documents, including the address for service. A director may have a residential address or they may apply to use their alternative address. They cannot, however, use the company’s address for service as their alternative address. Nevertheless, documents can still be served on them at that address for service. That’s fine; it sits in the law already. All this legislation does, and all this section does, is make sure that instead of a residential address, an alternative address can be used for service. There is no confusion in the law; the point’s been addressed.

There is confusion in the law, because section 387A(1) of the Companies Act is in regard to a director in their capacity as a director. Now, you can serve legal proceedings on someone in their capacity as a director or you can serve legal proceedings on someone because they’ve defamed you and called you an untrustworthy accountant, having nothing to do with their directorship. So the issue is, in an ordinary course of action, the member is right—you can get served at your address for service, which is ordinarily your solicitor or your company’s office, or you can get served at your residential address.

But we have now created a two-tier system where if you are serving legal documents on an individual, you therefore have to determine whether or not you are doing this in their capacity as a director or you’re doing it in some other capacity. Because if it’s as a director, you can serve it at the company that they have put as their address for service. If you’re doing it as an individual, you have to serve it at their—well, not their alternative address, because you can’t have that, because normally most people would use that as the company address.

So that’s the contradiction we’re creating. You’ve created two addresses where you can provide legal service. So if you are an individual who provides legal services—a person who goes to addresses and provides documents—you are therefore going to have to determine whether the documents you are providing are in the capacity of that individual as a company director, or in some other capacity. That’s the contradiction we’ve created, because most company directors around the country would have the address for service as being their company. That’s it. That’s the contradiction, and that’s what I’ve tried to raise. And to be heckled by members of the Green Party for saying that we’re sitting here filibustering, when they sit there day after day after day abusing members of Parliament in title changes of bills, is really disappointing and it only reflects more on them than it does on us.

Hon Marama Davidson: Keep going, but just be good at it.

Hon JAMES MEAGER: Mr Chair? Thank you, Mr Chair. I’ll take up the invitation to continue taking a call. Just to challenge one of the points that Mr Abel made in his interjections, which we are entitled to respond to, where he said, “Take another five-minute call.”—well, if he’d been here for long enough, he’d realise that actually most of us are taking succinct calls to ask direct questions of the member and to seek answers, and we still haven’t had answers to questions asked a long time ago. I know we don’t retread that because we’ve passed those clauses, but the Chair has worksheets with a number of questions that won’t have ticks beside them. So we will continue prosecuting this, because it’s our right as members to sit in this House, as long as we comply with the Standing Orders, to challenge and to scrutinise legislation, as is our number one job as legislators in this country.

Clause 6 agreed to.

Clause 7 Section 388A amended (Service of other documents on directors)