Sitting date: 8 Oct 2025
Clause 4 Section 215 amended (Public inspection of company records)

CHAIRPERSON (Maureen Pugh): Members, we come now to clause 4. This is the debate on the amendment to section 215, "Public inspection of company records". The question is that clause 4 stand part.

Hon JAMES MEAGER (National—Rangitata): Thank you, Madam Chair. Now, clause 4 amends section 215 and it relates to some of the content in clause 5 in so far as it refers to new section 360D and 360F, and it says that section 215 applies if those other sections apply.

I'm not going to talk about the content of those other sections, but I want to talk about the content of this particular clause for itself. The first part that I want to question the member about is the use of the word "may" in both of those clauses—well, new subsection (1A) and new subsection (1B). The use of the word "may": "a company may replace a director's residential address with their alternative address"—and also in (1B)—"a company may replace a shareholder's address". "May" indicates an optionality there. Why is it not a requirement on the company?

If someone chooses to use an alternative address, wouldn't there be, therefore, a requirement on the company to update their records rather than just give them an option? This is about the public inspection of those records, and if an individual changes to an alternative address but then the company is not required to update their records, how does that meet the intention of the legislation, which is to provide a sense of privacy if the original residential address remains on the record and the company is not therefore required to do it?

The director may well go to all extents to provide an alternative address, but if there's no requirement to actually change it and make sure that the public record reflects that fact, wouldn't that therefore defeat the intention of the bill in the first place?

Hon Dr DEBORAH RUSSELL (Labour): I'm going to suggest to the member the Hon James Meager that a director of a company has quite some power to ensure that the address on a company's register has changed to the alternative address. Directors have that kind of power. I'm going to suggest further that a director who goes to the efforts to have an alternative address—and there is a process there—will also be similarly motivated to ensure that the company's register is updated. This just gives the company's register, the person who's maintaining it, the capacity to do so.

Hon JAMES MEAGER (National—Rangitata): Further to that, what is the harm in allowing this to be optional? Why is there not a direct requirement that the company must replace the residential address with an alternative address? It could even be qualified if the particular director asked them to do so. I don't understand what the harm would be in requiring this. If the whole purpose of the bill is to provide—yes, we provide the option to provide an alternative address. But I assume that the director may need some sort of resolution to ask for the board in order to do so. It depends on how hands on they are with a particular company. What is the harm caused by changing "may" to "shall" and actually saying to companies you have an obligation to do this rather than leave it up to a particular board of directors at a particular time?

TOM RUTHERFORD (National—Bay of Plenty): Thank you, Madam Chair. We'll wait with bated breath the answer from the member the Hon Dr Deborah Russell in the follow-up question from James Meager around the changes to potentially requiring it, as Minister Meager outlined.

My question is around company record accessibility. Clause 4 inserts new subsections 215(1A) and (1B), which allow companies to replace residential addresses with alternative addresses in public records. How do the new subsections in 215(1A) and (1B), inserted by clause 4, interact with the main protections in new section 360D, which is if the Registrar removes public access to residential addresses, under new section 360D(2), why do companies also need the ability to replace addresses in their own records, under section 215(1A), and doesn't that create potential inconsistencies between what are company records and the official register? Haven't we then suddenly created some discrepancies between the two?

My question is: if the Registrar removes public access to residential addresses, under new section 260D(2), why do companies also need the ability to replace addresses in their own records, under section 215(1A), and does that not create potential inconsistencies between what are then on the company records and the official register?

Hon Dr DEBORAH RUSSELL (Labour): I'll repeat the answer I gave to the question that the Hon James Meager repeated about why it is using "may" rather than "shall" or "must". A director has an incentive to get that address changed to an alternative address. I don't think we need to legislate that the director needs to do that, and it gives the company the capacity to act. That's why the word "may" is used.

To the question from Tom Rutherford about inconsistencies between the company's records and the register of companies records, if the member cared to go to section 215 in the Companies Act, he would see that a company is required to keep records available for inspection by a person who serves written notice of intention to inspect on the company. That enables the company to ensure that an alternative address is used rather than the residential address, so it just does away with the concerns that there might be an inconsistency.

Dr VANESSA WEENINK (National—Banks Peninsula): Thank you, Madam Chair, and thank you for the very clear replies to our questions from the member in the chair. It is really helpful and is really getting through this very well.

This is one of the very important aspects that I remember during the select committee process. We did spend quite a bit of time debating around what the implications on the company records are. If you look at the company records through the Business New Zealand website or anything like that, you can find quite a rich amount of information on those company documents. Some of those documents, whether they're in PDF form or other forms that you can actually look for, actually have pages and pages of information about the company, about the work that the company's doing, some of their records. Sometimes they'll even have annual reports or sort of AGM-type notes and minutes that are recorded in there. Depending on how the company chooses to share their information or record their information, it can be quite verbose. There can be quite a lot of words used in there, so that, if you were to trawl through a lot of the documents, you may find that there are addresses or references to people scattered throughout.

One of the things that we discussed during the select committee process was—well, actually, when you look at the companies register, you see as a highlight the addresses come up, but in the actual documents on the company's records themselves, and those that are available for inspection, they can actually have the addresses throughout. Although it's beholden on the company to check all of that, it is potentially quite a manual process to go through some of the old records. If you look at the company's website, the access to the information and how far it goes back is quite rich in history now. You have records that go back many years. If one wanted to expunge the e-record of an address from all of the documents that are available publicly, it would be quite an intensely manual process.

I think my question to the member really is: do you think that would be quite a technical process and quite a long, drawn-out, manual process to do? Is the expectation and the safety that we're relying on here for people really buried in the fact that it would be an intensely detailed process to go through to get that information? We hope that people—the criminals or the slightly fixated individuals—might not actually have the energy or the tenacity or the understanding to really go to those extremes of really combing through past histories of old company AGM and annual reports and the kind of rich detail that is available on the company's website to find that information. It would be impossible for somebody to completely expunge all records.

I know, when we had these discussions at the time and we were involved in some of those very interesting and edifying discussions and hearings, that we heard from a variety of people that were representing those directors, and especially from, for example, the Institute of Directors, who really implored that there be no requirement for anyone to have any residential address information available anywhere. I think we have some sympathy with that because, really, what it's about is identifying, as you discussed, a person, not where they live. It's not actually about the address. We don't want, necessarily, to know exactly where that person lives. It's about making sure that of the 30-odd John Smiths that you have on the companies and directors register, that it's actually—

Stuart Smith: There's very few of them.

Dr VANESSA WEENINK: Yeah, well, there's 40-something on the page in there. There's a lot of the same name. It's about identifying the person, not about that. Are we relying on the tedious nature of going through the data that is there to protect people from the risk that they still may have somewhere there might be an address? Thank you.

Hon Dr DEBORAH RUSSELL (Labour): I'm just going to note, first up, that clause 4 concerns itself with section 215 and that section 215 is to do with the public inspection of a company's records at the company's offices. It's not at the Registrar of Companies; it's at the company's own offices. It's a much smaller operation there. Presumably a director will have some direct access to those records and can ensure that her or his alternate address is used rather than their residential address.

The member, then, really went on to discuss the matters that are sitting in clause 5, new section 360D(2), which is that "The Registrar must—(a) take reasonable steps to prevent public access from the New Zealand register". We did discuss this at length in select committee, discussing where a director's address might be available. Indeed, it might be available on old PDFs and need to be redacted from it and so on. This is why we have, in there, the reasonable steps. We expect, in the first instance, that the registrar of companies, or whoever's there, will actually do what they can to erase that residential address and replace it with the alternate address. My expectation is that, having done a good job of that, if the director themself comes across other places where the old address is still visible, then it may be possible that they can bring it to the attention of the Registrar of Companies.

There's a whole variety of mechanisms there. It's reasonable steps, not every single possible step. We would expect a reasonable standard of care. Of course, that's a term used quite frequently in the law. It's to take reasonable steps that can be tested, so I think that's a perfectly good way to do it.

Finally, the member did talk about—this does float through the entire bill, so I will address it now—the issue raised by the Institute of Directors, who said, "Well, why are we using these private addresses at all? Why are we using them for shareholders? Why are we using them for company directors?" In fact, there's a whole variety of instances where it seems odd that people's home addresses are so readily available. Indeed, those of us who are in public office often take steps to get our addresses removed from the electoral roll because, for good reason, we don't want people turning up and protesting outside our homes—or, at least, perhaps they might care to do so in a peaceful fashion. However, I'm just going to point out here that this is a good little piece of law. It does serve a very particular purpose.

There is better legislation coming. The Minister of Commerce and Consumer Affairs has assured me that he's working on his Companies Amendment Bill and that he anticipates having it in the House sometime soon. We don't know when that soon will be. I've had a pretty upfront exchange with him as to what I intend to do with this bill, and my commitment to him has been that, if his bill has its first reading before the end of the year, I will withdraw this bill. That is the commitment I've made to the Minister of Commerce and Consumer Affairs, and I intend to keep it. It's now on him to get his bill into the House. Having said all that, I take the point. There are many cases where we would prefer that we don't have home addresses readily available—as they are at the moment, with just a few clicks on a keyboard. The Minister's bill will provide a better solution. In the meantime, I want this band-aid.

RICARDO MENÉNDEZ MARCH (Musterer—Green): Thank you, Madam Chair. I move, That debate on this question now close.

Hon Member: Madam Chair? Directly relevant, Madam Chair.

CHAIRPERSON (Maureen Pugh): I did give notice earlier that these clauses are very consequential to the substantive part of the bill, which is clause 5, which we are coming to next, so I am going to put the closure motion.

Motion agreed to.

Clause 4 agreed to.

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