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  • Issue 28, May 2011 Commercial eSpeaking-Commercial eSpeaking-Newsletters -
    consumers should be familiar with two key provisions of the Act 1 Section 27 which prohibits anti competitive contracts arrangements or understandings Under the Act it is unlawful to enter into contracts or arrangements or arrive at understandings that would or may substantially lessen competition in the market 2 Section 30 which prohibits competing businesses entering into contracts and arrangements or arriving at understandings that do or may fix control or maintain prices or provide a mechanism for doing so When deciding whether competition has been or may be substantially lessened in the market the court will consider the impact the contract arrangement or understanding will or have on competition in the relevant market whether other market participants can compete and how difficult it is for new competitors to enter into that market Contracts arrangements and understandings between competitors dont have to be formally recorded in writing They could simply be an informal and possibly oral understanding created by a hand shake or even a nod of the head Consequences of breaching the Commerce Act The Commerce Commission investigates complaints or issues that are brought to its attention If it believes the Act has been breached it has a number of options including educating a business about how to comply with the Act issuing a warning or prosecuting the business in the High Court Penalties for a breach of the Commerce Act are severe Individuals can face penalties of up to 500 000 and organisations can be liable for the greater of 10 million or three times their commercial gain or 10 of turnover Reducing the risk of anti competitive behaviour Bearing in mind the penalties what steps can you take to avoid breaching the Act You should Ensure you and your relevant employees are familiar with the restrictions and requirements of the Act Avoid exchanging private information with your competitors If you are approached by a competitor business to discuss pricing immediately raise an objection and leave the discussion If you are approached by a competitor to discuss allocating customers bids for contracts or restrictions on outputs raise an objection immediately and leave the discussion and Review your internal documentation policies and procedures to ensure they comply with the Act Competing businesses shouldnt be discouraged from discussing industry related practices and issues but they must ensure they dont overstep the mark and inadvertently or not find themselves engaging in anti competitive behaviour Immediate steps should be taken to ensure compliance with the Act as the penalties can be severe Familiarise yourself with the legislation and ensure you have good systems and policies in place to avoid a breach BUSINESS BRIEFS New copyright law On 14 April 2011 the Copyright Infringing File Sharing Amendment Act was passed The new regime comes into effect on 1 September 2011 The Act establishes a three strikes regime in an effort to curb illegal file sharing over the internet It will not however apply to mobile phone networks until 1 August 2013 From 1

    Original URL path: http://www.dglaw.co.nz/newsletters/commercial-espeaking/issue-28-may-2011-commercial-espeaking (2016-04-27)
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  • Issue 27, February 2011 Commercial eSpeaking-Commercial eSpeaking-Newslette
    in personal grievance cases from what a reasonable employer would have done to what a reasonable employer could have done Prescribes minimum requirements of a fair and reasonable process for the court or Employment Relations Authority ERA to consider Allows the ERA to dismiss claims deemed to be vexatious or frivolous and to penalise parties for obstruction or delay Promotes mediation by providing mediation services for early problem resolution without representation requiring that priority be given in the ERA to mediated cases and prescribing provisions for mediators to make a recommendation for dispute resolution Removes reinstatement as a primary remedy in personal grievances and Provides that union access to workplaces is conditional on the consent of the employer which is not to be unreasonably withheld and allows employers to communicate directly with employees in good faith during collective bargaining The Holidays Amendment Act 2010 has changed the Holidays Act 2003 as follows Allows the cashing in of an employees fourth week of annual leave Allows the observance of public holidays on another working day by agreement Allows payment for a public holiday alternative holiday sick leave or bereavement leave during a close down period if it would otherwise have been a working day this change came into effect before Christmas 2010 Changes the relevant daily pay calculation and defining discretionary payments and Allows an employer to request a medical certificate earlier than the current three consecutive days provided the employer pays for it Both Acts double the maximum threshold for penalties to 10 000 for an individual and to 20 000 for a company or body corporate The Employment Relations Film Production Employment Relations Act 2000 known as the Hobbit Act was passed in late October 2010 It allows workers involved with film production work to be independent contractors rather than employees unless they choose to be employees by entering into an agreement that provides that they are employees Copyright Infringing File Sharing Amendment Bill an update The Commerce Select Committee has reported back with changes to the controversial Copyright Infringing File Sharing Amendment Bill The Bill has implications for all New Zealanders particularly those involved in sharing downloading music or movies without a copyright owners authorisation The Bill repeals section 92A of the Copyright Act and implements a three strike notice regime to deter illegal file sharing Under the proposed regime ISPs will send warning notices to customers advising them they have infringed copyright and the jurisdiction of the Copyright Tribunal is extended The Tribunal will be able to award damages of up to 15 000 and aims to provide a fast track low cost process to hear illegal file sharing claims Many observers remain sceptical as to whether this will be the case given the size of the Tribunal relative to the anticipated workload The Bill had originally included the power for a District Court to suspend an internet account for up to six months in appropriate circumstances The Select Committee has now recommended that this power be

    Original URL path: http://www.dglaw.co.nz/newsletters/commercial-espeaking/issue-27-february-2011-commercial-espeaking (2016-04-27)
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  • Issue 23, Autumn - Winter 2013 Commercial eSpeaking-Commercial eSpeaking-Ne
    The law does this because as a general rule those who have legal obligations of a personal nature should not delegate their duties to an attorney Your intuition also tells you that your attendance at a board meeting would be unfair to shareholders The law also reflects this instinctive need to protect shareholders The purpose of a limited liability company is to give shareholders i e investors a limit on their liability equal to the price for their shares should things go wrong while giving them a fair degree of influence over their investment For example they choose the directors and the directors cannot allow the company to enter into major transactions or alter shareholders rights without sufficient shareholder approval This balance works because the law treats a company for business purposes as if it was a real person The shareholders own it and the directors are responsible for the day to day management The SME model This will all seem rather artificial if youre the sole director and principal shareholder of a smaller company But if you enjoy the benefits of trading through a limited liability company its important to acknowledge all the nuances that come with it So if youre a sole director and you plan to be overseas or in hospital your company will need to appoint someone or another company to look after your companys affairs during your absence Its an important nuance but its a straight forward solution allowed by the Companies Act If a company appoints an attorney its powers as a company are delegated as if the company were a real person And like a real person your company can grant A general power of attorney that allows the attorney to look after all the companys money and property or A specific power of attorney that allows the attorney to manage specific matters or transactions such as the leasing of a property Again this solution appears deceptively simple The companys attorney will be able to conduct the companys affairs as if the attorney has the directors approval And if the companys actions suggest a breach of the directors duties to the shareholders or creditors the director may be held responsible So its important to appoint an attorney you can trust Its also vital to talk with us about the nuances of company law Business Briefs Employment Relations Amendment Bill The Employment Relations Amendment Bill ERAB introduced to Parliament on 26 April 2013 contains amendments to the Employment Relations Act ERA that go further than previously proposed A few noteworthy points are The Employment Relations Authority members will be required to give an oral decision or indication of its preliminary findings at the conclusion of an investigation hearing Flexible working arrangement requests are to be extended to all employees when their employment begins Greater scope for employers to withhold information particularly where information is about an identifiable individual other than the affected employee evaluative or opinion material compiled for the purpose of making a

    Original URL path: http://www.dglaw.co.nz/newsletters/commercial-espeaking/issue-23-autumn-winter-2013-commercial-espeaking (2016-04-27)
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  • Issue 20, Summer 2014 Trust eSpeaking-Trust eSpeaking-Newsletters - DGlaw
    cases the attorney may only be allowed to start acting once a doctor has certified that the donor is no longer mentally competent The EPA may even say which doctor or which type of doctor must provide the certificate Property attorney The primary duty of a property attorney is to preserve and protect the donors assets If the donor can still make some decisions or deal with some assets the attorney should help the donor to do so Its not the role of the attorney to give away assets 4 unless the donor has specifically authorised this for example by including a suitable clause in the EPA Attorneys must not use their position for their own benefit unless the donor has approved this Attorneys may use the donors money to refund out of pocket expenses the attorney has incurred Unlike a property manager appointed by the court an EPA attorney has no obligation to prepare annual accounts in any specific format Nevertheless its best if attorneys keep proper accounts in case they are later challenged Its also advisable to keep family members fully informed Even if the EPA doesnt specifically require these things its wise to avoid the sort of suspicion that can arise if family members feel they have been left in the dark Personal care and welfare attorney The primary role of the personal care and welfare attorney is to ensure that the donor is being well cared for and is in suitable accommodation Personal care and welfare attorneys will usually keep in close contact with the staff of the home or other place where the donor is living There have in the past been documented cases of elder abuse by family members and others Its important that personal care and welfare attorneys are on the lookout for anything like this The personal care and welfare attorney doesnt have any power to make decisions about marriage divorce civil union or adoption or to refuse normal medical care or procedures to save life or prevent serious damage to the donors health 5 Its important to understand that an EPA for personal care and welfare is not an advance directive or living Will Directions not to resuscitate or not to go to great lengths to prolong life do not belong in an EPA Acting prudently and selflessly The overriding requirement of all EPA attorneys is to act in the best interests of the donor of the EPA For example a property attorney should look for a prudent way to deal with this persons money bearing in mind that its not the attorneys own money Often the best question to ask yourself is what would the donor want in these circumstances Attorneys also are expected to help the donor develop whatever capacity he or she may have to make decisions Being an EPA attorney doesnt need to be a difficult task When in doubt youre entitled to ask advice from lawyers and health professionals as appropriate But its always wise to

    Original URL path: http://www.dglaw.co.nz/newsletters/trust-espeaking/issue-20-summer-2014-trust-espeaking (2016-04-27)
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  • Issue 19, Spring 2014 Trust eSpeaking - DGlaw
    Makesure you have a Will If you die without a Will theprocess to sort it all out is usually slower and more expensive to get thenecessary High Court order for an intestate estate called Letters ofAdministration than it is to get probate of a standard Will Special searcheshave to be made to make sure there are no children born out of wedlock and soon Just as with a Will its possiblefor someone who feels they have been left out unfairly to bring a claim againstthe estate under the Family Protection Act 1955 Property Relationships Act1976 and similar laws Common Intention ConstructiveTrusts Thenew weapon of trust law The widelypublicised separation and property dispute of Sally Ridge and Adam Parore sawthe High Court consider the concept of a common intention constructive trust While well established in Australia and England this concept is relatively newin the context of New Zealand trust law Whatis a common intention constructive trust A traditional constructive trustis created where there has been no direct or indirect declaration of trust butthat it would be unfair for a legal owner to have full beneficial ownership Acommon intention constructive trust is based on the assertion that the partieshad a common intention for assets to be held for their equal benefit regardless of the legal ownership of those assets SallyRidge and Adam Parore case 2 Following the separation of SallyRidge and Adam Parore the division of property between them was made difficultas the majority of the assets were held in two family trusts Both Sally Ridgeand Adam Parore and their four children were beneficiaries of each trust Sallyand Adam were also trustees of each trust The parties assets wererestructured so that the family home was owned by Sally Ridges trust and the businessassets held by Adam Parores trust This structure was set up in early 2007 toprotect their family home from any trading liabilities of the couple Theevidence showed that it was the intention of the parties that Adams trustwould fund the parties lifestyle and allow the income and assets of bothtrusts to be shared equally between the parties Its not clear whether Sally Ridgereceived independent legal advice in relation to the restructure but it isclear that she was kept well informed as she attended meetings with andreceived email correspondence from the lawyer instructed to put therestructure in place Sally was however not particularly interested in thedetails of the restructure and relied on Adam to ensure the arrangements wereappropriate In mid 2008 Adams trustpurchased a company called Small Business Accounting SBA SBA was successfuland allowed Adams trust to fund the parties living expenses Sally Ridge and Adam Paroreseparated in 2010 Sally claimed that the parties had a common intention thatSBA would be held equally for the benefit of the parties and therefore Adamstrust was holding half of the shares in SBA on a common intention constructivetrust for her trust While few if any cases of acommon intention constructive trust have been recognised in New Zealand the Australian and English authorities are clear

    Original URL path: http://www.dglaw.co.nz/issue-19-spring-2014-trust-espeaking (2016-04-27)
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  • Issue 18, Summer-Autumn 2014 Trust eSpeaking-Trust eSpeaking-Newsletters -
    the Trustee Act 1956 provides for the continuing trustees to have the power to replace the incapacitated trustee on the basis that they are unfit or incapable of acting If the person with that power is not the incapacitated trustee then that person with the power can remove and if necessary replace the incapacitated trustee with a new trustee This is usually done by deed Under s51 of the Act the High Court also has the power to remove and replace an incapacitated trustee if its inexpedient difficult or impractical to do so without the courts assistance Old age and infirmity have been held sufficient grounds for the court to make an order Sections 43 and 51 only apply however when you are replacing the incapacitated trustee with a new trustee These sections cannot be used to remove an incapacitated trustee who is not being replaced In this situation an application to the High Court will need to be made Removal or replacement of the trustee is however only the first step and there can be lingering issues The incapacitated trustees name will have to be taken off the title to the trusts assets Being incapacitated the trustee cannot sign any documents transferring the trusts property to the new trustees Where the incapacitated trustee has an attorney appointed under an enduring power of attorney that attorney can complete documents and make decisions about the incapacitated trustees personal property This does not extend however to the property the incapacitated trustee owns as trustee of a trust as trust assets are not the personal property of the trustee Land Information New Zealand LINZ which administers our land title system takes the view that an attorney for an incapacitated trustee cannot sign documents relating to trust assets on behalf of the incapacitated trustee Vesting orders The only satisfactory way to rectify the title to the trusts property is to make an application to the High Court for a vesting order under s52 of the Act Under s52 the court has the power to vest the trusts assets in the names of the new trustees Looking ahead Applications to the High Court are expensive and slow Its not satisfactory that a problem such as this cannot be resolved by a quick and inexpensive process This problem has been raised in the Law Commissions recent report on the Law of Trusts and also on previous occasions Reform is urgently needed and has been recommended to the Law Commission Hopefully changes will be made soon otherwise many ordinary trusts will have to meet the cost and experience unnecessary delays Looking into the Election Crystal Ball A change in government may have implications for your trust With an election coming up this year we thought it would be interesting to turn our minds to what impact this election or the next may have on how you operate and what you place in your family trust The Labour Party is promising a capital gains tax CGT of 15

    Original URL path: http://www.dglaw.co.nz/newsletters/trust-espeaking/issue-18-summer-autumn-2014-trust-espeaking (2016-04-27)
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  • Issue 15, Spring 2012 Trust eSpeaking-Trust eSpeaking-Newsletters - DGlaw
    standard set out in Armitage v Nurse is sufficiently high and to what extent trust deeds should exclude or restrict a trustees liability if they fail to carry out properly the duties imposed on the trustee by law or by the trust deed The Law Commission is considering seven options OPTION 1 Status Quo No Regulation of Exemption Clauses Overseas trends and the Commissions own view is it may not be satisfactory to leave matters as they are The balance appears to be too much in favour of the settlor and trustee and a greater measure of accountability to beneficiaries is needed Option 2 No Prohibition but a Beneficiary Can Apply to the Court for Relief This option would leave any exclusion clause in an instrument to take effect according to its terms but a beneficiary would have the right to apply to the court to exclude its operation There is the issue of the cost of applying to the court and possible uncertainty Option 3 No Prohibition but Duty of Paid Trustee to Inform Settlor The Law Commission for England and Wales recommended against changes to the law but where a clause in a trust deed exonerates a paid trustee for liability for negligence that trustee must take steps to inform the settlor of the meaning and effect of the provision Option 4 Partial Prohibition Trustee Excused if They Exercise Reasonable Skill and Care This option would be to prohibit clauses where they absolve trustees who are individuals from liability for acts or omissions in bad faith or without reasonable skill and care As long as a trustee acts in good faith and with reasonable skill and care the trustees will not be subject to liability The likelihood of trustees having to go to court at great expense to absolve themselves of liability is likely to be a very unattractive option and will discourage individuals from becoming trustees The Commission believes professional trustees should be treated differently Option 5 Requirement for Reasonableness A trustee could only take advantage of an exemption clause that was reasonable Until the legislation is tested by the courts uncertainty is created for trustees and beneficiaries and may lead to litigation to determine its scope and operation The Commission is interested in this option OPTION 7 Total Prohibition Option 6 Dual Standard Lay trustees would continue to be able to rely on exemption clauses that limited their liability for all conduct short of dishonesty Professional trustees would not be able to rely on exemption clauses to the extent they absolve them for failure to exercise reasonable skill and care The Commission is interested in this option It would be possible to prohibit all exclusion clauses in trust deeds for both individual and professional trustees The Commission does not favour this option Life as a trustee is never going to be straightforward or without risk If you have any concerns about your role astrustee please be in touch with us Will Makers do have a Responsibility

    Original URL path: http://www.dglaw.co.nz/newsletters/trust-espeaking/issue-15-spring-2012-trust-espeaking (2016-04-27)
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  • Issue 14, Summer 2012 Trust eSpeaking-Trust eSpeaking-Newsletters - DGlaw
    protection against future risks turn into hiding assets from your creditors Taylor v Official Assignee2 was a recent test In 2000 Mr Mrs Taylor had set up a trust Because they did not want to have to pay gift duty Mr Mrs Taylor followed what was then the usual procedure Their house was sold to the trustees at market value and the trustees acknowledged they owed that amount back to the couple Mr Mrs Taylor began a gifting programme reducing the amount owed to them by each giving 27 000 annually in reduction of the amount owed Unfortunately Mrs Taylor had an acrimonious falling out with her business partner She became depressed and was prescribed Prozac She also contracted hepatitis As a consequence her business affairs got into a muddle In particular she did not deal with tax matters and eventually owed substantial amounts to Inland Revenue By 2006 Mrs Taylor was bankrupt The Official Assignee was appointed to take over her finances The Official Assignee claimed that the trust had been set up in order to defeat the rights of creditors such as Inland Revenue The Official Assignee claimed the gifts to the trust were invalid under the Property Law Act and the Insolvency Act The High Court agreed with the Official Assignee but Mr Mrs Taylor appealed to the Court of Appeal The appeal court said that the gifts were not invalid When the trust was set up Mr Mrs Taylor were able to pay their debts and had no creditors who they were trying to avoid It was only later that Mrs Taylor incurred liabilities to Inland Revenue The appeal court was satisfied that Mr Mrs Taylor were able to pay their debts even when they made the later gifts to the trust Although Mrs Taylor had started to run up debts to Inland Revenue she could borrow money from the trust which could extend the loan on the house property if necessary Most importantly even if all the gifts to the trust were invalid this would not help get the property back from the trust When the house was sold to the trust the trustees signed an acknowledgement of debt This said that Mr Mrs Taylor could ask for interest each year but the full amount was not repayable for 30 years So all the Official Assignee could do was to demand interest at ordinary commercial rates Everything else was locked away in the trust Arrangements of this type have been fairly common for some years now We now have some assurance from the Court of Appeal that these arrangements do protect assets from creditors Last year in Regal Castings3 the Supreme Court overturned a trust because the settlors had transferred their house to the trust knowing that they would then be unable to pay their debts The Court of Appeal emphasised that Mr Mrs Taylors situation was different They could pay their debts at the relevant time and there was no evidence they were trying

    Original URL path: http://www.dglaw.co.nz/newsletters/trust-espeaking/issue-14-summer-2012-trust-espeaking (2016-04-27)
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