Chapman Tripp has made a submission to the Epidemic Response Committee on the COVID-19 Response (Further Management Measures) Legislation Bill (the Bill). The Bill is being considered on an accelerated timeframe this week, with the Government having signalled it intends Parliament pass the Bill in urgency in the week of 18 May.
Our submissions, which are explained in more detail in our full submission, include:
- Some of the changes intended to respond to COVID-19 should be made permanent, particularly those relating to use of electronic communication and the conduct of meetings held using electronic means.
- We support the director duties safe harbour regime, in relation to the reckless trading and incurring of obligations director duties, noting that other key director duties – s 131 (good faith, best interests of the company) and s 137 (due care and skill) – still must be complied with.
- We note that the reckless trading and incurring of obligations duties have not been reviewed by Parliament since being enacted in 1993, but it would be timely to consider more permanent reform after implementation of the more immediate COVID-19 responses, as the Courts (judicially and extra judicially) have expressed concerns about the drafting – we share those concerns.
- We support the Business Debt Hibernation regime, but think some aspects of it are overly complex and some formalities such as a requirement for statutory declarations could be simplified.