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Mitigating the impact of COVID-19 on commercial contracts

The ongoing Coronavirus (COVID-19) pandemic, and the measures implemented by governments worldwide to contain it are having an unprecedented impact on global financial markets, trade, and commerce.

As businesses deal with the growing impact of COVID-19, a key aspect of a broader risk management strategy, is to review key contracts to understand the risks (and opportunities) that may be presented if contractual obligations are severely affected.  Fortunately, there are various protections available for businesses that are concerned about their ability to meet their contractual commitments.

Does your contract provide force majeure protection?

Force majeure clauses are typically included in contracts in case certain events occur, beyond a party’s control, which prevent it from performing its contractual obligations.  If a force majeure clause is triggered, then the impacted party will have the ability to suspend the performance of its obligations and, in some cases, terminate the contract altogether.

Force majeure clauses typically require a party to establish that:

  • a force majeure event has occurred;
  • the force majeure event was beyond the party’s control;
  • the force majeure event either delayed or prevented the party from satisfying its contractual obligations; and
  • there were no reasonable steps that could have been taken to mitigate the impact of the force majeure event.

Whether a party will be able to rely on the effects of COVID-19 to exercise its rights under a force majeure clause will depend on the nature of the contract, the wording of the force majeure clause, and the impact COVID-19 has had on the parties’ positions.  In our experience, outbreaks such as COVID-19 are typically captured by force majeure provisions.

Caution should be exercised before a contract is terminated in reliance on a force majeure clause.  If a party incorrectly asserts that a force majeure event has happened in circumstances where it is not contemplated by the contract, then the other party can seek damages on the basis that the contract has been repudiated.

Can your contract be terminated on the grounds of frustration?

If a contract does not contain a force majeure clause that is triggered by COVID-19, then the contract may be frustrated by operation of law.

Frustration contemplates that, where a contract has become impossible to perform or radically different than what the parties initially agreed, due to the occurrence an unforeseeable event, then the impacted party is excused from its failure to perform its obligations and the contract is treated as being automatically terminated.

Frustration can apply in circumstances where:

  • a change of law or government directive renders performance illegal; or
  • the purpose of the contract is not able to be fulfilled (for instance, where the contract relates to an event that is no longer going ahead).​

As with force majeure clauses, businesses should be careful before terminating contracts on the grounds of frustration.  If it does not apply, then the claimant may have wrongfully repudiated the contract and exposed itself to a damages claim from the other party.

What other clauses may apply?

It will be important for businesses to review all relevant clauses against the impacts of COVID-19 on their business.  These include:

  • termination provisions;
  • material adverse change provisions; and
  • change in law provisions.

These provisions may provide a party grounds for suspending the performance of their obligations or terminating the agreement.

What steps can businesses take to mitigate risk?

In light of the current uncertainty associated with COVID-19, there are a range of measures that we encourage businesses to take to limit their exposure:

  • Undertake a review of all key contracts to determine whether they contain a force majeure clause and, if so, the conditions for triggering it.
  • Engage, as early as possible, with customers and suppliers to consider alternatives to avoid or minimise the impacts of COVID-19 (particularly as force majeure clauses often include a duty to mitigate the impact of the force majeure event).
  • Make enquiries with your insurance broker as to whether insurance cover is available under a business interruption policy.
  • When negotiating new contracts, carefully consider the potential impacts of COVID-19 (and similar outbreaks) and clearly outline what the parties intend to occur if the contract is affected.

Get in touch

Please feel free to get in touch with us if you would like assistance in assessing how your contractual obligations might be affected by COVID-19 and your available options.

Defending your dog

Unfortunately, New Zealand dog owners are regularly before the courts for the alleged misconduct of their dogs. In 2018 alone, local councils commenced 467 prosecutions in courts across the country under the Dog Control Act 1996, 82 of which resulted in the destruction of the dog.

As an owner (or a person in control/possession of a dog), you can be criminally liable for the actions of your dog. If your dog attacks a person or animal, you can be convicted and sentenced to a fine of up to $3,000 (for the most common offences). If the attack causes injury, there is the possibility of a fine, community work or even a term of imprisonment.

If your dog is involved in an attack, it is likely that a complaint will be made to your local council. The council’s dog control officers will investigate and determine whether there is evidence supporting the complaint and may decide to file charges against the owner.

The council does have discretion in terms of whether or not to file a criminal charge. By engaging constructively with council from the start, you may be able to negotiate an alternative solution for you and your dog. We recommend engaging a lawyer from the outset to provide you with the best prospects of avoiding prosecution. That said, a reasonable rule of thumb is that a prosecution will occur if the dog attack resulted in an injury to person or animal.

Owners are understandably eager to ensure that their dog is returned if the council has impounded their dog following an alleged attack. Before the council can consider returning a dog to its owner, they must decide whether your dog poses a threat to the safety of people or animals if it were released. If the answer is no, you will be given written notice and have seven days to pay the pound fees and claim your dog.

If the council has concerns about the risks your dog may pose, your dog is likely to remain impounded until the case has been heard. As an owner, you can challenge this decision and try to secure your dog’s release by showing that the council does not have reasonable grounds for its position. Legal representation can be of considerable assistance when you are trying to achieve “doggie bail”.

If the council decides to prosecute you as owner, you can plead either guilty or not guilty to the charges. If you plead not guilty, the matter will proceed to a trial before a judge at your local District Court. This is not a quick process, and from the time charges are filed against you, it can take more than a year for a prosecution to reach a trial date.

If you plead guilty to a dog attack charge (or are found guilty following a trial) then the court will sentence you for the offence. While the most likely outcome for an owner is a fine, the court must also order the destruction of the dog, unless it is satisfied that the circumstances of the offence were exceptional.

The exceptional circumstances test has a high threshold. The Court first considers whether the circumstances of the attack were unique, special or substantially unusual. If satisfied the exceptional circumstances exist, then the Court will make an assessment as to the future risk of the dog attacking another person or animal. The Court will consider the nature of the attack, whether there was an injury, the history of the dog owner, past behaviour of the dog, and whether any preventative steps were taken to reduce risk and if so, why these steps failed. Generally speaking, if there is a risk of a further attack, any exceptional circumstances will not be enough to prevent a destruction order.

Whether post-attack factors, such as subsequent obedience training, can be taken into account law remains unclear. We note, however, that a Court of Appeal decision on this issue is due in the near future, so watch this space.

If you find yourself at the centre of a dog control matter, we recommend you engage legal representation as soon as possible. Haigh Lyon has substantial experience in dealing with local council prosecutions and understands the importance of bringing your dog home. We are Auckland based but are able to travel across the country to defend your dog.

Farewell to Rob Wills

It is with sadness that we announce Rob Wills will be retiring from the firm early next year.

Rob is much loved by clients and staff alike.   His zest for squeezing the most out of life is infectious.

Rob joined Haigh Lyon as a partner in 1992 having previously been a partner at another firm.  Like Rob, his clients have been loyal, and followed him to the new firm.  He continued to advise on property, trust and commercial matters, and in the intervening 28 years he has never had a quiet patch.

He was even busier outside the office.  While raising and educating four children, Anna, Nicola, Julia and Jonathan, he somehow managed to find time to run, cycle and swim.  And he did this a lot!

Rob is a well-known figure at endurance events.  He completed the Coast to Coast three times, participated in numerous marathons including the New York Marathon – with a number of his family in tow, smashed three Ironman races and rode Alpe D’Heuz. He also represented New Zealand at three World Triathlon Championships, proudly captaining the team in Chicago.

As many of you know, it is not unusual to see Rob running or biking around Auckland on a Sunday, putting most of us, no matter what age, to shame with the energy and discipline he brings to his training.

He also continues to be an active member of Downtown Auckland Rotary, including a term as president.

The secret to fitting all this in?  Sleeping through law society seminars.  (Rob is famous for nodding off as soon as the presenter begins).  And a loving and supportive wife, Joanne; who is just as much a part of the staff as Rob.

The firm owes a lot to Rob, not only for his legal knowledge and fantastic clients, but also his mentoring and guidance. Haigh Lyon has a unique and supportive culture, and many clients will not be aware of the extra lengths Rob goes to;  whether it involves getting dressed up for a function, presentation of monthly staff awards or getting involved in firm activities like the corporate challenge. A few years ago, a staff member was moving to Australia, so we cleared away the desks, divided the staff into two teams and had a game of indoor cricket between Australia and New Zealand. We needed a surprise streaker so we secretly asked Rob.  In typical Rob fashion he quietly snuck out donned his speedos, a cape and a mask and ran out onto the ‘pitch’, to give a farewell hug.

Rob turned 70 this year, and is going to take some time to travel and hang out with his four grandchildren.  But we expect he’ll still be around the office anytime there’s a morning tea; though hopefully not in his speedos!

It might only be a matter of time before your farming operation is feeling the heat of a council prosecution…

If you haven’t been subject to one you are likely to know someone who has and, despite good intentions, it might be only a matter of time before your farming operation is feeling the heat of a council prosecution.

Unfortunately, they are something of an occupational hazard for farmers – particularly when it comes to the discharge of effluent in dairy farming.

Council prosecutions are nothing like a speeding ticket. The fines imposed by the courts can be in the hundreds of thousands of dollars and have the potential to cripple a business. Farmers should, therefore, have at least a basic understanding of the process and consequence of a council prosecution and know where to turn for help if they find themselves in the hot seat.

Council enforcement action begins with an investigation. That is the information-gathering stage where council officers try to confirm the nature and extent of suspected wrongdoing. Offending on farms often comes to the attention of council officers during routine monitoring of properties. Public complaints are another common way concerns are referred to councils.

Once a council has learned of suspected non-compliance its officers have legal powers to enter private property to collect information and evidence. One important exception, however, is that council officers are not authorised to enter private homes. If council officers want to do that they must apply to a court for an order or search warrant.

If, following an investigation, council officers are confident the evidence they have collected is sufficient to support a prosecution and that such a step is in the public interest, ie, worth ratepayers’ money, then formal charges will be filed in court against the alleged offender.

There are a number of charges available to councils under the Resource Management Act (RMA) and Building Act (BA). Common RMA charges include using land in breach of the district rules, usually doing something without a consent when one was required, and discharging contaminants into or onto water or land. The most common BA charge is doing building work without or not in accordance with a building consent.

For most offences under those acts councils do not need to prove a person or company intended to commit the offence. Usually, it is enough for a council to show that a person or company was responsible for the wrongdoing in terms of having caused or allowed the incident to happen. That does mean the ability to defend a charge is limited. Furthermore, if you or your company employs or contracts others to do work in relation to your property and they fail to comply with the law then you could also be liable for their offending.

There are certainly avenues for defending council prosecutions. Significantly, charges under the RMA and BA must be filed in court within six months of the council learning of the offending or within six months of the date when the council should have become aware of the offending. That could mean, for example, if council officers had been at a property for a building consent inspection and should have observed wrongdoing at the same time then the six month clock would start ticking even if the officers did not actually notice the issue at the time. Charges might also be defended on the basis the action or event triggering the offending was beyond your control and could not have been foreseen, eg, a natural disaster or sabotage.

More often than not council prosecutions are resolved by the person or company charged pleading guilty at an early stage in the proceeding. However, some prosecutions do go all the way to trial.

The usual consequence of pleading guilty or being found guilty of an RMA or BA offence is a fine. The maximum penalty for BA offences, such as building contrary to or without, a building consent is $200,0000 though the penalties actually imposed are generally at or below $20,000.

The most commonly charged RMA offences carry maximum penalties of a $300,000 fine and two years jail for an individual or a $600,000 fine for a company. Fines imposed for RMA offending are often significantly more than for BA offending. For example, fines in excess of $100,000 are not uncommon for offending concerning the discharge of dairy effluent.

Good legal representation at sentencing can be essential for ensuring the fine you are required to pay is reasonable. Individuals or companies pleading or found guilty of BA and RMA offending will also usually receive a conviction on their record. However, it is sometimes possible to apply for a discharge without conviction if it can be shown the consequences of conviction are out of all proportion to the seriousness of the offending. If such an application is successful it usually means you will still pay a fine but will avoid a conviction.

If you or your company are facing a council investigation or a full blown prosecution we recommend seeking urgent legal advice.

 

 

Thinking of buying an investment property?

As part of the government’s efforts to address the concerns around rising house prices, new tax rules on ring-fencing rental losses have been introduced.  The goal of the new rules is to improve housing affordability for owner-occupiers by reducing demand from property speculators and investors.

The new ring-fencing rules came into effect on 1 April 2019 and will impact 2020 income tax returns.

What do the rules mean?
Historically when a rental property made a tax loss for its owner, this loss was available to offset against the owner’s other income – income such as salaries and certain business profits – resulting in less taxable income, and less taxes paid overall.

The new ring-fencing rules mean this loss offset will no longer be available.  Any rental loss will carry forward into future years and will only be available for offset against future residential property related income.

This puts residential property losses into their own category, separate from other sources of income.

Who will be impacted?
The ring-fencing rules only apply to losses made from residential land, however there are a number of exemptions, as follows:

  • Property used mainly for business or farmland
  • Property subject to “mixed-used” asset rules (such as a holiday home that is sometimes used privately and sometimes rented out)
  • Entities that are in land-related businesses such as land development or land trading
  • Certain employee accommodation and properties owned by companies except close companies with less than 5 shareholders holding more than of 50% voting interests

What about the “bright-line test”?
The bright-line test defines profits from the sale of residential properties (main home exempted) bought after 29 March 2018 and sold within 5 years (or within two years if bought between 1 October 2015 and 29 March 2018), as generally taxable.

If you have ring-fenced property losses available at the time the bright-line profits occurred, then the losses can be used to reduce the profits.

Similarly, any loss made on a property sale subject to the bright-line test, will be ring-fenced and carried forward.  It will only to be available for offset against other residential property income.

How are the rules applied?
The default position is that the rules are applied on a ‘portfolio basis’ meaning losses from one property can be used to offset profits of another property, in the same ownership.  The alternative of isolating losses of one property from another is also available but it is unlikely to be recommended due to the additional compliance required, and the generally less favourable outcomes.

What about residential properties owned by trusts and companies?
Residential properties that fall under the ring-fencing rules will be impacted regardless of whether they are owned by trusts or companies.  Exclusions such as the main home exclusion will also still apply.

Look-through company (‘LTC’) structures where income/losses are transferred directly to shareholders are also impacted.  Shareholders can no longer offset LTC residential property losses against their other income.  Instead, the losses hold their form and will be ring-fenced as if they were generated by the shareholder directly.

The ring-fencing rules also cover situations where a company or trust ownership structure is used to circumvent the rules. An example might be the use of a personal loan to buy shares in a company that owns the residential property – separating the ring-fenced income from loan interest expense.  In this case if more than 50% of the company’s assets are residential properties then any income and expenses relating to the property are ring-fenced regardless of whether the expense is in the company’s name, or not.

This rule can extend to properties owned outside of New Zealand as well, meaning losses from overseas rentals might also be ring-fenced.

Conclusion
The ring-fencing rules are another reduction in the tax benefits previously available to property investors, following on from the removal of depreciation claims.  Over time we will see if the rules have a meaningful effect on property prices, or conversely a flow on cost to residential rents.

The information produced above should not be relied upon as tax advice. Tax advice should always be sought from a professional and tailored to your specific circumstances.

If you have any questions or would like to discuss any of the changes please contact The Business Advisory Group on 09 300 6404

Before you sign the lease…

Houston we have a problem! To avoid such words after having signed an agreement to lease it is important that tenants get advice before signing the agreement.  Once an agreement has been signed it is binding and therefore difficult to negotiate any amendments.

Here are some tips that tenants should consider before entering into an agreement to lease:

Rent Reviews
Rent reviews play an important part in any lease. Look to limit exposure to large rent hikes. Reviews are undertaken through a market review or increased in line with CPI. A tenant should look to impose a cap on any increase e.g. no increase in rent should be greater than 2%.
Rent disputes are resolved by valuers and arbitration. To avoid these costs tenants may consider having CPI increases or fixed rent increases. However, the risk is that these increases will leap ahead of the market. It is often advisable to have a mixture of CPI reviews and market reviews.

Outgoings
Another large expense is outgoings. Outgoings are expenses that are incurred through the running of the premises and include such things as insurance, rates, utilities and service or maintenance contracts. The landlord will usually pay these costs and seek reimbursement from the tenant. Outgoings are often payable in addition to rent.
Tenants should review the list of outgoings carefully and undertake an inspection of the premises and the building services to ascertain whether they are in good repair. If anything needs fixing, the costs will often be passed on to the tenant as part of the outgoings.

Reinstatement Obligations
Tenants who are excited about taking on new premises often forget about their obligations when the lease ends. This oversight can be costly.
Leases often require a tenant to reinstate the premises to its original condition, which can be expensive. This can be resolved by the insertion of a clause in the agreement outlining that the landlord agrees that the tenant shall not be required to reinstate the premises at the expiry of the lease.

Guarantees
It is common for landlords to require a guarantee of some sort; either a personal guarantee from the directors or a bank guarantee.  Guarantors should be wary that if the lease is assigned their liability will continue until the next rent renewal. Accordingly we often recommend that any guarantee given, whether personal or bank, be limited to a certain period ranging between three and 12 months depending on the lease term.  This is something that needs to be inserted into the agreement to lease and is something that landlords commonly concede.

Lease incentives
Tenants should negotiate some form of incentive into a new lease but it can be tricky to know what is acceptable. It is important to remember the agent is working for the landlord and is therefore unlikely to advise a tenant as to how much they should be seeking or what form it should take. Examples of incentives are a rent free period or fit out contribution. Experienced property lawyers will know what is acceptable in the market and will be able to provide guidance.
Tenants should obtain tax advice as some incentives will be regarded as income and therefore might not be as valuable as they first seem.

These are just a few examples of where an experienced property lawyer can save a tenant money, and future headaches.

 

Seed Funding Options for Start-Ups

In the early stages of a start-up, founders typically seek to bootstrap (i.e. self-fund) their operations in order to preserve value through their hard work and expertise. At some stage, most start-ups will need a cash infusion to grow their business and take it to profitability. That’s where investors come in.

Before raising capital, it is important to understand the most common forms of seed investments: equity and convertible debt. Each form of funding has its own pros and cons, and is a better fit for certain situations than others.

Equity
Equity represents an ownership interest in the company.  While equity doesn’t provide as much certainty of repayment as compared to a loan, it gives the investor a greater chance of participating in the upside in a profitable company or a future sale.

The size of an investor’s shareholding in the company will be negotiated based on the amount of the investment and the agreed valuation of the company. It generally involves a compromise between the investor’s eagerness to invest in the company and the founder’s desperation to raise funds.

Equity typically takes the form of ordinary shares or preference shares.

Ordinary shares have various rights attached to them (such as voting and dividend rights), but they usually rank behind other securities in terms of priority.

Preference shares differ from ordinary shares because of the additional rights (preferences) that attach to them. They typically confer on the investor:

  • A liquidation preference, which entitles the investor to recover an additional amount (ahead of all ordinary shareholders) in a liquidation of the company; and
  • An entitlement to receive dividends in priority to the holders of ordinary shares; and
  • An ability to convert the shares into ordinary shares on a future exit.

Preference shares are typically used for more substantial investments as their terms are generally complicated and heavily negotiated.

Convertible Debt
A convertible debt instrument involves the company borrowing money from an investor in the expectation that the debt will convert into equity in the company in the future (such as after a capital raising or a sale event). It is essentially a mix of equity and debt.

Here is a basic example of how convertible notes work:

  • An investor invests $200,000 in a start-up by way of a convertible note.
  • The terms of the convertible note are a 20% discount and automatic conversion after a future capital raising exceeding $1 million.
  • When the next capital raising occurs at a $2 million valuation, the convertible note will automatically convert into equity.

Let’s assume the shares are issued for $1 per share.  As a 20% discount applies, the investor can use their $200,000 investment to purchase shares in the next funding round at the discounted rate of $0.80 per share. This gives the initial investor $250,000 worth of shares for the price of $200,000 (representing a 25% return).

Convertible debt has become a popular form of seed funding for a number of reasons.

  • Valuation: Issuing equity requires you to value your company. This can be a difficult exercise for a company in its early stages. A key advantage of a convertible note is that it doesn’t require the company to be valued until a larger equity round is raised.
  • Cost and speed: Convertible debt is simpler to document than equity financings. This means that they are generally less expensive and that funding rounds can be closed more quickly than equity raisings.
  • Control: Many founders are (naturally) concerned about relinquishing control of their company. Holders of convertible notes typically receive minimal control over the company (for instance, no veto rights or director appointment rights). This is especially helpful for start-ups wishing to undertake a further capital raising without investor interference.

As early stage investment is risky, investors often sweeten their deal by asking for a valuation cap. A valuation cap limits the price at which convertible notes will convert into equity. It is used to protect early investors in case the company’s value skyrockets in the next funding round. For instance, if the valuation cap is $1 million, but the company’s valuation at the next funding round is $1.5 million, then the amount invested will convert into equity at the $1 million valuation cap.

Summing Up
Every situation calls for a different type of investment structure.  It is important to understand the subtleties of the various structures and balance the particular needs of the company against the risks and rewards available to the investor.

Spousal Maintenance; How New Zealand Stacks Up

How do the New Zealand courts deal with spousal maintenance?
It is important to note that spousal maintenance in New Zealand (from one adult to support the other adult) is different to child support (for the children).

In New Zealand spousal maintenance is payable if, following separation, one party is unable to meet their reasonable needs. If that party can demonstrate that their inability to meet their reasonable needs arises because of one of the qualifying circumstances, then spousal maintenance may be payable by the other party.

The ‘qualifying circumstances’ are slightly different depending on whether the parties were married or in a de facto relationship but include things such as responsibility for care of children, standard of living during the relationship, earning capacity and the effect of the division of functions within the relationship. It is important to note that we have a ‘no fault’ system in New Zealand so it does not matter if one party behaved poorly in the course of the separation.

When considering an application for spousal maintenance, the court will look at the claiming party’s budget of their ‘reasonable needs’ together with the other party’s budget and what that person might reasonably be able to afford to pay.

In New Zealand, spousal maintenance is generally an interim measure and the recipient is obligated to take the necessary steps to support themselves within a reasonable period of time. The precise length of any necessary maintenance payment will largely depend on the circumstances of the parties involved. The obligation to pay maintenance in New Zealand ends when the receiving party enters into a new de facto relationship.

How does this differ from other countries?
Unsurprisingly, the law on this issue varies across boundaries. A few of the most noticeable differences arise in the USA and UK, including:

  • The qualifying circumstances and amount of maintenance payable; and
  • The length of time for which maintenance can be payable.

USA
In the USA, laws on alimony (as it is known) vary significantly across states. In some states, alimony is only awarded in marriages or civil unions of 10 years or longer and domestic violence can be a valid ground to make a claim. In some states, the person who was ‘at fault’ for the end of the relationship may be relevant (i.e. if the party claiming alimony had an affair, that may be a factor in deciding whether they should receive payment).

There are sometimes limits placed on the amount of maintenance payable, such as the lesser of $5,000 per month, or 20% of the paying party’s income.

Other states (such as New York) do not impose the same strict guidelines on qualifying circumstances or amounts of maintenance, and allow judges to make decisions that they consider best in the specific circumstances of the parties.

Across the USA, ‘temporary alimony’ continues to be the most common type of award, with the length of payments sometimes based on the length of the relationship. It is worth noting though, that ‘permanent alimony’ (i.e. payment for life) does exist in some states and is awarded in circumstances which are considered appropriate.

UK
In the UK, the qualifying circumstances for spousal maintenance and the way in which awards are calculated have similarities to New Zealand law. However, what is noticeably different, is the length of time which maintenance payments can continue for.

As is the case in the US, spousal maintenance can be paid for a fixed term (such as until the youngest child turns 18), or it can be payable for life (until the paying party dies). The latter are often coined ‘meal ticket for life’ orders and are widely reported on in the media. These awards appear to have become less common in the UK and the Courts have increasingly applied the ‘clean break’ principle which ends financial ties between separated parties at a point in time which is considered fair.

The 2015 UK case of Wright v Wright made headlines around the world after a Judge suggested that the ex-wife of a wealthy veterinarian should ‘get a job’ to help supplement the spousal maintenance she was receiving, now that the children were over 7 years of age.

Despite this, spousal maintenance in the UK is still considered one of the more generous across jurisdictions and ‘joint lives’ maintenance awards continue to be made. The question as to whether ‘joint lives’ orders are appropriate is hotly debated by lawyers and legal writers, with many calling for law reform in this area.

How does New Zealand measure up internationally?
Spousal maintenance in New Zealand is not as generous as some jurisdictions in terms of the length of time for which it is payable. The very broad and potentially lifelong obligations sometimes seen in the UK and USA, whilst not inconceivable under New Zealand Law, are extremely rare and would arguably be contrary to the spirit and intent of the Family Proceedings Act 1980, which governs spousal maintenance in New Zealand. There is an obligation on the receiving party to meet their own reasonable needs at some stage.

However, our law does ensure that the actual ‘reasonable needs’ of both the claiming party, and the paying party, are taken into consideration. Rather than applying limits to the amount of maintenance payable, each New Zealand case is decided based on the specific circumstances of the individuals involved.

We have expanded our litigation services

Haigh Lyon has expanded the litigation service available to its clients.

Nathan Batts has recently returned to our litigation team as a Senior Associate and is an experienced advocate. He has previously represented both the Crown and regulatory bodies in serious and complex prosecutions and enforcement action and has also acted for defendants in such proceedings.

As a result, we can now be of particular assistance to companies and individuals facing enforcement action from regulators involved with business operations as well as individuals charged by the Police. Examples of relevant regulators include local councils responsible for enforcing the Resource Management Act and the Building Act, WorkSafe responsible for enforcing health and safety laws, and the Commerce Commission responsible for enforcing fair trading laws. In addition, if you, or someone close to you, have the misfortune of being charged with offending by the Police – however serious – we can assist with resolving and, if necessary, defending such charges.

Alternatively, if you or your business would like advice to ensure that your conduct or operations are compliant with applicable legislation, we are able to provide you with such guidance.

Our expanded regulatory work now also covers online communications. Recent legislation has brought harassment protections up to date for the digital age. There are now effective legal options, including court orders that are available to respond to online harassment or abuse.

If you, a loved one, or your business are facing formal charges, some other enforcement action, or are simply being investigated for suspected non-compliance or offending, then we are well-placed to assist you and welcome your contact. Alternatively, we can assist if you are simply looking for advice or guidance in terms of complying with relevant regulations. In addition, if you or someone you care about are the subject of online abuse or harassment, this is not something you have to put up with – there are legal options available to you for shutting down such conduct and we can help.

If we can be of assistance please contact Nathan directly on 09 306 0608 or email him at nathan.batts@haighlyon.co.nz

Changes to Employment Law Legislation

The Employment Relations Amendment Act 2018 was passed late last year, introducing a number of employment law changes aimed to restore protections for employees and strengthen the role of collective bargaining in the workplace. You may be surprised to find you are already familiar with many of the changes as they turn the law back to how it was as recently as 2015.

The 90 day trial period is now restricted to businesses with less than 20 employees. This change comes into effect on 6 May 2019 and protects employees from unjustified dismissal from the day they start a job. However if you are a larger business, you can continue to use probationary periods to assess an employee’s skills and suitability, but an employee can still raise a personal grievance for unjustified dismissal if they are dismissed during the probationary period.

The requirement to provide employees with prescribed rest and meal breaks has also been restored, with the number and duration depending on the hours worked. This change is aimed to benefit workplaces by helping employees work safely and productively.

If despite your best intentions you end up in the Employment Relations Authority (ERA), the first remedy considered by the ERA will be reinstatement. However in reality this remedy is infrequently used due to most employees preferring to seek compensation rather reinstatement.

If you would like specific advice or guidance on the legislation changes, or assistance to review or update your employment agreements, please contact our Employment Team.