au_common_admin, Author at McCaw Lewis

Residential Tenancies Amendment Act 2020

Posted on February 12, 2021March 19, 2026 by au_common_admin

The Residential Tenancies Amendment Act 2020 (RTA) came into force on 11 August 2020 and introduced staggered changes to New Zealand rental laws aimed at better aligning them to the realities of renting in New Zealand.

While the first phase of these changes has been effective since 12 August 2020, the second more substantial set of changes took effect from 11 February 2021. A final phase of changes will follow in August 2021.

The RTA reforms will substantially change how renting in New Zealand works, and it is crucial that landlords familiarise themselves with the new rules. Below is a brief summary of some of the most important changes (a full list is available on the Tenancy Services website available here).

Phase One – Changes that have applied from 12 August 2020

Rental Increases are now limited to once every 12 months. Previously, rental increases could occur every 6 months.
The RTA no longer applies to transitional and emergency housing which is funded by a government department or provided under the Special Needs Grants Programme.

Phase Two – Changes that took effect from 11 February 2021

Rental bidding will be prohibited. This means that rental properties cannot be advertised without a price listed, and landlords cannot organise a “rental auction”.
Landlords will be prevented from unreasonably withholding consent to minor changes to the rental property e.g. adding fixtures and undergoing minor renovations or alterations.
All fixed-term tenancies will automatically convert into a rolling periodic tenancies unless they are terminated with notice within a specific timeframe.
Notice periods and termination procedures will change, particularly in relation to periodic tenancies. Landlords will no longer be able to end a periodic tenancy without cause by providing 90 days’ notice.
New termination provisions are introduced which limit the situations when a landlord may terminate a tenancy. These include if the tenant is showing ‘anti-social’ behavior, where it would be unreasonable to require continuation of the tenancy, and where the tenant is physically abusive.
Penalties for breaching the RTA will significantly increase.

Phase Three – Changes taking effect by 11 August 2021

Tenants will be able to withdraw from a lease quickly and without financial penalty if they are experiencing family violence. Other changes in respect of family violence and physical assault will come into force.

If you would like further information about how the RTA changes may affect you, please get in touch with the team at McCaw Lewis.

Dale acknowledges the assistance of Emma Toseland and Amy Bird in preparing this article.

Dale is a Director and leads our Property Team. He can be contacted on 07 958 7428.

Nau mai Te Ara Hou – Māori Land Reforms Now in Effect

Posted on February 11, 2021March 19, 2026 by au_common_admin

On 6 February 2021, changes to Te Ture Whenua Māori Act 1993 came into force. This article provides a summary overview of the changes and what they mean for Māori landowners, trusts and incorporations.

Introduction

Reforms to whenua Māori came into force on 6 February 2021 and take effect from 9 February 2021. The changes aim to make the Māori Land Court process more efficient for Māori landowners, whānau, hapū and governance entities. There are three key areas of change: Dispute Resolution, Succession and Land Utilisation.

Dispute Resolution

Māori land disputes can now be resolved through a voluntary dispute resolution process. The new tikanga based mediation service is free to users. Initially Māori Land Court Judges will act as mediators, however, over time, the service will expand to include non-judicial mediators with the right skills. To use this service your dispute must be related to Māori land and all participants must agree to the process. The process can be initiated even if you have a current application before the Court. To apply to use this service, an application can be made to the Māori Land Court. Once the process is underway, parties will decide on a mediator, date and venue for the mediation and agree on tikanga practices for the process. If agreement is reached, the agreement will be provided to the Māori Land Court, who may make a Court order to formalise the agreement.

Simple and Uncontested Succession and Trust Applications

The new reforms also make some applications for succession and trusts easier for Māori landowners, whānau, hapū and governance entities. While the application process remains the same, where a matter is uncontested or “simple” these applications can now be dealt with by a Māori Land Court Registrar without the need for a Judge or a hearing date. Examples of these applications include simple successions, resignation of trustees and uncontested trust applications. Applications must still be notified to interested persons and can only be dealt with by the Registrar if they are not contested. If you wish for your matter to continue to be heard by a Judge, you can elect this when filling out your application form.

Land Utilisation

New changes have been made to occupation orders and utilising Māori Reservation lands. These changes aim to make it easier for Māori landowners to establish papakāinga on their whenua. Occupation orders will now be able to be made for beneficiaries of a whānau trust in their name rather than the trust name. For land vested in a trust or an incorporation, consent of the trust or management committee is still required. Māori reservation trusts now have the ability to grant a lease or occupation license to enable the land to be occupied or built on for a period of time in excess of the previous 14 year limitation. This provision aims to enable Māori landowners to obtain finance and to make it easier to build on Māori reservation land.

Other Reforms

A number of other changes have also been introduced to clarify matters including:

Māori customary land and Māori reservations cannot be compulsorily acquired or vested under another statute
Ownership interests in Māori land cannot be taken to pay debts or unpaid fines
The process for the right of first refusal for sale or gift of Māori freehold land
Protecting Māori land from claims under the common law doctrine of adverse possession
Removing the requirement that a strip of land needs to be set aside for an esplanade reserve when Māori freehold land is partitioned

To find out more information visit Māori Land Court – https://bit.ly/3a8GGfb – or Te Puni Kōkiri – https://bit.ly/2Zbap0F.

Kylee Katipo and Huia Harding are both members of our Māori Legal Team. Kylee is a Senior Associate and can be contacted on 07 958 7424, and Huia is a Solicitor and can be contacted on 07 958 7474.

Privacy Act 2020

Posted on December 22, 2020March 18, 2026 by au_common_admin

Although it retains the same basic approach as the 1993 Act, the new Privacy Act 2020 introduces some new features and obligations of which all businesses and organisations dealing with personal information need to be aware.

Information Privacy Principles

The privacy regime in New Zealand is governed by a series of information privacy principles, which act as guidelines for all collection, storage, use, and disclosure of personal information.

The new Act leaves these principles largely unchanged against the 1993 Act, however there are a few additions:

Data minimisation: You can only collect identifying information if it is necessary. If you don’t need it to achieve your purposes, you should not collect it.
Manner of collection: This must be fair and reasonable (g. not unreasonably intrusive, in the circumstances). The new Act uses the collection of information from children and young people as a particular example of where circumstances need to be carefully considered.
Unique identifiers: If you are assigning a unique identifier to an individual (which can only be done if necessary to carry out your functions efficiently), you need to take reasonable steps to protect that identifier from being misused. This is designed to minimise the risk of identity theft.
Overseas disclosure: This is a brand new principle, applying where you disclose personal information overseas. This is discussed further below.

Mandatory Breach Notification

Under the new Act, agencies which hold personal information now have an obligation to notify individuals and the Privacy Commissioner if they have lost control of that information, where that loss has caused or is likely to cause serious harm. This notification must be made as soon as practicable after you become aware of that loss of control, and must contain certain prescribed information. This gives affected individuals a chance to regain control of their information, for example by changing their password or cancelling their credit card.

However not every breach will require disclosure, and care needs to be taken when determining whether disclosure is necessary in a particular situation. When assessing whether or not a breach has or is likely to cause serious harm, organisations must consider a range of factors including the nature of the information, the nature of the harm, who has obtained access to that information as a result of the breach, and any action that has been taken to reduce the risk of harm.

The Privacy Commission has an online tool called “NotifyUs”, which can be used to determine whether a privacy breach meets the “serious harm” threshold, and needs to be disclosed.

Failure to notify the Commissioner is a criminal offence carrying a potential fine up of to $10,000.00. An affected individual can also make a complaint to the Commissioner, which could result in additional penalties.

Cross-Border Protections

The new Act recognises that an increasingly globalised economy means that disclosure of information across borders has become commonplace, so a new information privacy principle has been introduced. This allows you to disclose information to overseas organisations, if:

There is a contract between you and the overseas organisation which includes privacy protection provisions (the Commission has published model clauses which are available to use);
The overseas organisation carries on business in New Zealand, and is consequently subject to the Act;
The overseas organisation is covered by comparable privacy laws in its country of origin; or
The affected person understands the consequences and consents to the disclosure of their information.

Where you give information to an overseas organisation just to hold, and not to use for its own purposes (for example cloud-based storage), you are still responsible for any privacy breach by that organisation. In some situations, the overseas organisation can be responsible as well.

Access

Individuals have the right to access information held about them. If you refuse to provide that access, the individual can make a complaint to the Privacy Commissioner, who will review your decision to refuse.

You don’t have to provide access in all circumstances, and the grounds on which you can refuse have changed slightly with the new Act. In addition to the existing grounds (for example, protection of an individual, evaluative material, trade secrets), you can now refuse to disclose personal information if disclosure would create:

A serious threat to the health, safety or life of an individual or public health and safety; or
A significant risk of serious harassment, or would cause significant distress to the victim of an offence.

If the Commissioner disagrees with your decision to refuse, it can issue an access direction requiring you to provide the information.

Compliance Notices

The Privacy Commissioner has a new power to issue compliance notices, requiring you to do or to stop doing something in order to comply with the Act. The intention is that these notices will allow the Commissioner to go beyond just responding to individual complaints focussing on enforcement and individual harm. Instead, the Commissioner can proactively address systemic issues to reduce the aggregate effect of breaches, without the need for serious harm to an individual.

If the Commission determines that you could be issued with a compliance notice, you have the right to respond to the draft notice and the right to appeal if and when it is issued. Notices may be either privately issued or publicly notified, depending on the nature of the notice and the public interest in its content. Failure to comply with a notice is an offence, with a penalty of up to $10,000.00.

Other Offences

In addition to the offences of refusing to comply with a compliance notice and failing to report a privacy breach, the new Act introduces two more offences, each of which carry a penalty of up to $10,000.00:

Misleading an organisation to access someone else’s personal information (e.g. impersonating someone else to access their information, or pretending to act with that person’s authority); and
Destroying someone’s personal information in response to an access request from them.

Evaluation

Although no material changes may be required to your privacy policy as a result of the changes to the Act, now is a good time for every organisation dealing with personal information to review the systems they have in place for collecting and storing personal information to make sure they are fit for purpose, sufficiently secure and able to be accessed and corrected if requested.

Jessica is an Associate in our Commercial Team and can be contacted on 07 958 7436.

Trusts Act 2019: Indemnities

Posted on December 9, 2020March 19, 2026 by au_common_admin

The Trusts Act 2019 provides a long-awaited update to the current trust law in New Zealand and will replace the Trustee Act 1956 on 30 January 2021. Earlier this year we provided a brief outline of the key changes in the new Act. This article provides some more information on one of those changes – the new restriction on the indemnity that can be provided to trustees.

Trustee Indemnity

Under the current Trustee Act, there are no specific provisions regarding trustee indemnity. However, case law does provide that trustees must act in good faith, honestly and for the benefit of all beneficiaries and they cannot be indemnified for failing to do so.

The Trusts Act 2019 (the New Act) does have specific provisions that deal with trustee indemnity. The provisions state that a trustee will be held personally liable for any breach of trust that arises as a result of a trustee’s dishonesty, wilful misconduct, or gross negligence. No indemnity for such actions can be included within a trust deed and if it is, it will be deemed invalid. This closes a previous gap in the law where broad indemnity clauses may have protected individual trustees even when acting in a way which is considered to be grossly negligent – a relatively high standard. Gross negligence is not specifically defined in the New Act, however section 44 of the New Act does give the Court factors to consider when determining if a trustee has acted in a way that is grossly negligent. The Court must consider whether a trustee’s conduct was so unreasonable that no reasonable trustee in that trustee’s position and in the same circumstances would have considered the conduct to be in accordance with the role and duties of a trustee. We anticipate that the interpretation of this section will likely be a litigious area in the future as more and more trustees are faced with these circumstances.

The intention of the Law Commission for limiting the indemnity of trustees is to provide further protection to beneficiaries as they are usually the ones that ultimately lose when a trustee is protected by an indemnity clause.

Trustees will no longer be able to rely on broad indemnity clauses in trust deeds to protect themselves from beneficiary claims. Trustees will need to take a higher level of care in all of their dealings with the trust and the general operation/administration of the trust.

It is timely for settlors and trustees alike to review the administration of the trusts in which they are associated and seek legal advice as to the implications/changes of the New Act.

Advisor Liability

There are also additional restrictions on limitations of liability for those paid to advise on the creation of trusts, and it is important to note that these are not limited to lawyers. Under the New Act, proper advice must be given regarding liabilities, indemnities, and trustee duties and if not, then an advisor can be held liable. There will be no ability to contract out of this new requirement.

Final Comments

If you are a trustee, or regularly give advice on trust creation/establishment, please feel free to get in touch to ensure you are protected/aligning yourself with the provisions of the New Act.

If you would like further information please contact Amanda Hockley on 07 958 7451.

Last Chance to Change My Will

Posted on November 12, 2020March 19, 2026 by au_common_admin

Is a will valid when instructions have been given, the will has been prepared, reviewed and approved, but not signed? Although an unsigned document can be a will, recently the Court of Appeal decided an unsigned will was not valid because the circumstances suggested the will-maker did not have capacity and was planning to take another step before signing the will.

This article reviews the Court of Appeal decision Marshall v Singleton [2020] NZCA 450, a case about James (86), who was hospitalised and diagnosed with terminal cancer in December 2017, and his four children.

Due to James’ illness his four children, Peter, Christine, Ann, and Susan, organise a roster to care for him. Ann and Susan withdraw from the roster due to a falling out in their relationship with the other siblings. James is upset and in his dying days only Peter and Christine are there to care for him. James reviews his 2015 will which left his estate in equal shares to his four children and asks Peter to prepare a new will. On 30 December 2017, James explains to Peter how he wants to divide assets – one-third of his home equally to Ann and Susan, two-thirds of his home equally to Peter and Christine, and his remaining assets equally to Peter and Christine. Due to James’ illness, Peter types up a will for him which was read by James on 3 January 2018. Allegedly James audibly confirmed that the will outlines his intentions, but he does not sign the will. James says he wants to write a letter explaining the new will to Ann and Susan. James passes away on 11 January 2018 before signing the will or writing the letter.

Peter applies to the High Court for Letters of Administration annexing the unsigned will. Ann and Susan oppose the application on the grounds that James, lacking testamentary capacity and being extremely ill, could not have properly expressed his intentions or signed a will. Dr Jane Casey, consultant psychiatrist specialising in old age psychiatry, gives expert evidence saying that on the balance of probabilities James did not have capacity, even though James’ treating doctor said that he did. The High Court finds in favour of Ann and Susan, but Peter appealed to the Court of Appeal in 2020.

Test of Capacity

The Court of Appeal upheld the High Court’s decision for two reasons. Firstly, Dr Casey said that James was very unwell, on strong medication and had some incidents of confusion recorded in his file, so he most likely did not have the required mental capacity. Secondly, James wanted to explain the new will in a letter to Ann and Susan before signing it, which he never did.

There is a well-established test for testamentary capacity dating back to an 1870 English case (confirmed in a New Zealand Court of Appeal case, Woodward v Smith [2009] NZCA 449) setting out what the Court looks at when deciding if an unsigned will is valid.

Sickness can be challenging, however, this does not mean that the person necessarily lacks capacity to prepare or sign a will. The Court will assess whether the will-maker:

Has intellectual and moral faculties;
Understands the nature and effect of the will, and the extent of their property;
Comprehends and appreciates the potential claims to their assets;
Has the strength to comprehend making a will;
Understands the contents of the will;
Is free of any mental disorder influencing their affections, moral compass or natural faculties, with no delusion or insanity.

Other principles the Court considers are:

Evidence of an “unsound mind” by lack of organisation, physical weakness or the effect of old age;
The will-maker must have enough intelligence to understand and appreciate the will-making considerations. Full mental strength is not required;
Extreme physical weakness is not a bar to making a final will, even though it could prevent other business (e.g. attending a board meeting);
Whether they have put thought into making the will. Someone who has thought about their will for a long time may find it easier to make one in physically bad health than someone who is new to it;
A strong memory is not required;
Less than peak mental capacity is acceptable, provided a rational, fair and just will can be made.

If you would like to discuss wills, will validity or testamentary capacity further, please do not hesitate to get in contact with one of our solicitors.

If you would like further information, please contact Daniel Shore on 07 958 7477.

Director Duties When a Company is Faced with Insolvency

Posted on November 4, 2020March 19, 2026 by au_common_admin

The recent decision of Debut Homes Limited (in liquidation) v Cooper [2020] NZSC 100 is especially relevant for company directors given the present financial uncertainties caused by COVID-19. The case summarises director duties under the Companies Act 1993 (“the Act”) for companies facing insolvency.

In short, directors need to be extremely careful when their company is faced with liquidation. Where a company becomes insolvent, directors should look to the formal and informal alternatives to liquidation contained in the Act. If those mechanisms fail, then generally the only other option is liquidation.

Choosing to continue trading while insolvent will expose directors to significant personal risk, even if directors have taken professional advice to continue trading. If there is no reasonable prospect of returning to solvency, it will make no difference if directors honestly think that some of the creditors will be better off by continuing to trade.

It is noted that the Court did not decide whether it is legitimate for a business suffering temporary liquidity issues to continue trading in the hope of salvage and if so, for how long.

History

Mr Cooper was the sole director of Debut Homes Limited (“Debut”). Debut was a residential property developer and had been balance sheet insolvent since 2009. Mr Cooper made the difficult decision to wind down the company in 2012.

Mr Cooper was advised that completing and selling existing company projects would create a surplus of $170,000 to repay secured creditors. Mr Cooper was also advised that completing those projects would result in GST payable of over $300,000. No provision was made for the GST.

Debut completed and sold its remaining projects the following year. In doing so, various debts were incurred and paid, both with secured creditors financing the projects, and unsecured trade creditors supplying materials and labour. Mr Cooper focused on the position of those creditors, while neglecting to pay the GST payable on the sale of the properties.

For a period of approximately 18 months leading up to completion of the development work on the properties, Mr Cooper worked full-time for Debut and received no salary.

When the IRD placed Debut into liquidation in March 2014, there was money owing to the IRD, trade creditors, and Mr Cooper’s family trust. Debut’s liquidators brought proceedings against Mr Cooper for a breach of director duties.

In the High Court Mr Cooper was found to be in breach of sections 131, 135, and 136 of the Act. Mr Cooper was ordered to pay $280,000 compensation to the company under section 301 of the Act. The High Court also rejected a section 138 defence that he was entitled to rely upon professional advice that he had taken at the time. The Court of Appeal overturned that decision, saying that Mr Cooper had made a “perfectly sensible business decision”. The Supreme Court reversed the Court of Appeal decision and re-instated the High Court decision.

Statutory Considerations

The Court considered the following director duties:

Section 131: The duty to act in good faith and in the best interests of the company;
Section 135: The duty to avoid “reckless trading”;
Section 136: The duty not to agree to the company incurring an obligation unless the director believes on reasonable grounds that the company will be able to perform the obligation when due.

The Court rejected a section 138 defence (directors may rely upon professional or expert advice), finding that the professional advice received was too general in nature to act as a proper defence.

Section 301, which governs consequences for a breach of the Act, was also discussed. When a company is placed into liquidation, section 301 of the Act empowers a Court to order that director to contribute such sum to the assets of the company by way of compensation as the Court thinks fit.

Court Analysis of Director Duties

Section 131 – Directors to act in good faith

Mr Cooper submitted that the steps he had taken improved the overall asset base of Debut and minimised the ultimate loss to creditors as a whole.

The Court noted that the section 131 test is subjective. However, section 131(b) also requires directors to assess the interests of all creditors, not just some. The Court held that Mr Cooper had failed to consider the interests of the IRD by not paying Debut’s GST obligations.

In effect, Inland Revenue (and thus the taxpayer) was being used as an involuntary bank. Mr Cooper had subsequently breached section 131.

Section 135 – Acting in a manner likely to cause substantial risk to the company

Mr Cooper argued that completing the remaining company projects was a sensible business decision that had the potential of providing higher returns than immediate liquidation would have done. Mr Cooper also did not consider Debut’s financial position as salvageable.

The Court noted that other formal and informal insolvency mechanisms were available under the Act to increase returns to creditors. Had these not been available, the only proper course was liquidation.

The Court held that by continuing to trade and knowing that by continuing to trade would result in a shortfall, is a clear breach of section 135.

Section 136 – Incurring only obligations that the company can perform

Mr Cooper’s course of action effectively gave secured creditors (one of which was Mr Cooper’s own family trust) a higher rate of return at the expense of incurring other liabilities which would not be paid (GST).

The Court held this was a clear misinterpretation of section 136 by Mr Cooper. The company was clearly not going to be able to perform its GST obligations, and it was not legitimate to “rob Peter to pay Paul”.

Key Learnings

If a company reaches the point where continued trading will clearly result in a shortfall to creditors and the company is not salvageable, then continued trading will be in breach of section 135 of the Act.

A breach will occur whether or not continued trading is projected to result in higher returns to some of the creditors than would be the case if the company had been immediately placed into liquidation, and whether or not any overall deficit was projected to be reduced.

There will be a breach of section 136 of the Act if directors agree to debts being incurred where there are no reasonable grounds to believe the company will be able to perform its obligations when they fall due.

When faced with insolvency, there will be no breach of section 131 if a director honestly believed it was acting in the best interests of the company. However, there will be a breach of section 131 if a director failed to consider the interests of all creditors.

The emphasis is that at all times (including where a company is insolvent) directors must comply with their duties under the Act.

Daniel acknowledges the assistance of Andrew Hong in preparing this article.

Daniel is a Director and leads our Dispute Resolution Team. He can be contacted on 07 958 7477.

Resource Management: Partnership with Iwi Governance

Posted on August 24, 2020March 19, 2026 by au_common_admin

Recent developments in Taupō have shown how governance functions might be shared between the Crown and Māori governance entities under the provisions of the Resource Management Act 1991 (RMA). Section 33 of the RMA provides that a local authority may transfer one or more of its RMA functions to other public authorities, including iwi authorities, and it is under this section that the Waikato Regional Council and Ngāti Tūwharetoa are working together.

The Ngāti Tūwharetoa rohe extends across the central plateau of the North Island to the lands around Mount Tongariro and Lake Taupō. Waikato Regional Council has agreed to transfer some of its functions to the Tūwharetoa Māori Trust Board (the Board), which will take effect in September 2020. The Board will be responsible for assessment of water quality in Lake Taupō and its feeding rivers, and will monitor groundwater and rainfall activity across a variety of Lake sites. The move towards this role has been gradual, as the Board has carried out some of this monitoring in the last two years.

The Board is hopeful that this role will open doors for employment to local people in the environmental and scientific fields.

The Waikato Regional Council will still play a role in the wellbeing of Lake Taupō. For instance, the Council will continue to fund the monitoring of the water quality of the Lake, with details of that monitoring still being available to the public via the Council.

This recognises and formalises the longstanding role of Ngāti Tūwharetoa as the kaitiaki of the whenua and waters of Lake Taupō. Further, this relationship sets a precedent for the ways that Crown entities can share stewardship of the land with Māori governance bodies and in continuing discussions as to what indigenous governance can look like.

For more information, please see the media statement released by the Board.

If you would like further information please contact Dale Thomas on 07-958 7428.

COVID-19 – First Employment Law Case in the COVID-19 Era

Posted on August 10, 2020March 19, 2026 by au_common_admin

The Employment Relations Authority has released a pivotal decision in the first employment law case in the COVID-19 era. In Raggett & Ors v Eastern Bays Hospice Trust [2020] NZERA 266, the Authority reminded employers that despite the Alert Level 4 lockdown and government restrictions, employment law continues to apply to all employment relationships, especially regarding employment agreements. Variations to the terms of employment agreements must be agreed to by employees, to avoid unilateral changes being considered unlawful and employers being liable for breach.

The Facts

Eastern Bays Hospice Trust (the Employer) closed over the COVID-19 Alert Level 4 lockdown, applied for the Wage Subsidy and subsequently made its Employees redundant. The Employer stated it would pay the Employees 80% of their usual pay for their notice period.

The issue at hand was whether in accepting the Wage Subsidy, the Employer was somehow released from its obligations to pay wages in the manner required under the employment agreements and the Wages Protection Act 1983. In applying for the Wage Subsidy, the Employer declared that they would use their best endeavours to pay employees at least 80% of their wages, which can only be imposed with employees’ agreement.

In this case the main concern raised was that the Employer had unilaterally decreased Employees’ pay without consultation and agreement from them. The Employer had effectively altered the terms of the employment agreement, and as no agreement for the variation was sought or given, the Employment Relations Authority ruled that the Employer unlawfully varied the employment agreements.

The Argument

In their defence, the Employer argued they were discharged of their obligations under the Wages Protection Act 1983 as the Employees were not “working”, New Zealand was in lockdown and the Employees could not work from home. The Authority found that the Employer’s argument was invalid, as the Employees were “ready willing and able to work” but were unable to because of the COVID-19 restrictions. Therefore, the Employees were still owed wages and the Employer was liable.

Going Forward

The main learning from this case is that to vary terms of an employment agreement (e.g. reducing hours, pay, and/or notice period) the explicit written consent of an employee is required. Without that consent, any deduction could be unlawful and the employer (as in this case) could be liable to pay wage arrears.

Employment Law Assistance

Renika Siciliano and Jerome Burgess are able to assist with employment matters relating to COVID-19, and provide guidance on crafting policies in relation to your business’ response to COVID-19, or any future pandemic event.

Renika is a Director and leads our Workplace Law Team. She can be contacted on 07 958 7429.

Jerome is an Associate in our Workplace Law Team and can be contacted on 07 958 7427.

Post-Settlement Governance Entity

Posted on July 27, 2020March 19, 2026 by au_common_admin

Many iwi have concluded their Treaty of Waitangi settlements but a number are still in the process of doing so. Establishment of a Post-Settlement Governance Entity (PSGE) is an integral step in the settlement journey and important for the future success of iwi claimant groups.

What is a Post-Settlement Governance Entity?

A PSGE is the entity that receives and manages the settlement assets on behalf of the iwi claimant group. Establishing a PSGE is required for settlement; the Crown will not complete settlement until a PSGE is established and ratified by the claimant group.

Key Requirements

Although a PSGE is designed by an iwi group to suit the iwi and their wider context, the Crown must approve the final PSGE to ensure, from its perspective, that the settlement redress is going to be held for the right people and in a responsible way. There is a set of key Crown requirements that a PSGE must satisfy. A PSGE must be:

Representative of the iwi/claimant group
Transparent in its decision-making and dispute resolution procedures
Accountable to the iwi/claimant group
For the benefit of the members of the iwi/claimant group
Ratified by the iwi/claimant group

Start Discussions Early

Generally the main focus during settlement negotiations is achieving an Agreement in Principle followed by a Deed of Settlement. However, given the significance of the PSGE and the Crown process to approve and ratify the proposed PSGE, we advise that iwi should start discussions early during the negotiation process as to what would be the most suitable PSGE to represent iwi members post-settlement.

Early discussions about the PSGE are important for the following reasons:

Keeping iwi members informed so that they are part of shaping the PSGE to reflect their reality, and that iwi members understand and accept the proposed PSGE. Early involvement and hui with iwi members increases the likelihood that the claimant group will buy into, accept and ratify the final PSGE proposal.
Gaining Crown acceptance; practically this means working with the Crown at an early stage in the development of the PSGE. This is important in gaining the Crown’s final acceptance of the proposed PSGE. It also provides time to work through any bespoke arrangements to ensure the proposed PSGE model can be achieved.

PSGE Structures

The most common form of PSGE is a private trust that is governed by a trust deed. The trustees are generally members of the claimant group, and the initial trustees will be appointed/elected at the same time the PSGE is established. While a private trust is recommended as the PSGE itself, other potential structures will inevitably form part of the wider post settlement governance structure to hold commercial assets and/or manage charitable functions.Within the Crown framework, there is more than one way to structure a PSGE and it is not a ‘one-size fits all’ exercise. Our team can assist iwi/claimant groups in working through a variety of issues pragmatically and in context, to ensure that a PSGE will best serve its members in the future.

Katia is a Senior Solicitor in our Commercial Team and can be contacted on 07 958 7443.

Business Debt Hibernation – Survival Following COVID-19

Posted on July 16, 2020March 19, 2026 by au_common_admin

What do you do when a debtor company asks you for Business Debt Hibernation? Business Debt Hibernation (BDH) allows companies affected by COVID-19 to put in place a one month voluntary arrangement whereby creditors are paid a percentage of outstanding debt, with the balance delayed. Under the new Schedule 13 of the Companies Act 1993, where debtors require further time, and if creditors agree, a further period of six months protection can be arranged.

Does your debtor company qualify?

A debtor company may apply for BDH if:

It was able to pay its debts as at 31 December 2019;
It has or is likely to have in the next six months significant cashflow problems, however will be able to pay its debts after that six month period (and by no later than 30 September 2021);
At least 80% of the directors pass a resolution for BDH for an initial one month period;
The directors who vote for BDH sign a certificate setting out the grounds as to how the company will be able to pay its debts within the prescribed timeframe;
The directors state they are acting in good faith.

Companies registered after 1 January 2020 and before 3 April 2020 are automatically excluded from applying for BDH.

What say do creditors have?

Before expiry of the initial one month period, creditors must vote as to whether BDH should continue for a further six months. All company creditors should receive:

A copy of the proposed resolution for BDH for a further six months;
The proposed arrangement;
“How to vote” instructions;
Confirmation that the vote is binding.

For the vote, a “related creditor’s” vote cannot be taken into account. After a successful vote, notice of the BDH extension will be registered with the Companies Office. The six months starts from the date of registration.

The arrangement

An arrangement can:

Reduce the amount to be paid during BDH (however, creditors cannot alter debt interest rates);
Postpone payment dates;
Prevent the exercise of powers/restrain creditor rights during BDH. For instance, it could be that a debtor company only pays 40 cents in the dollar during BDH, but the 60 cents in the dollar remains to be paid after BDH.

An arrangement cannot cancel, vary, or prevent the exercise of creditor rights at the end of the BDH.

During BDH, recovery options can be limited. To ensure recovery, it is important to closely review the arrangement and decide whether the arrangement affords adequate protection.

Following BDH

BDH will end:

After the initial one month plus six months (seven months in total); or
Earlier if the directors agree.

The Court may order that a creditor is not bound by an arrangement if the arrangement approval process was flawed or is unfairly prejudicial to the creditor. There are strict timeframes on challenging an arrangement in Court, so being proactive is essential.

On receipt of a BDH notice, reviewing the proposed arrangement is a useful first step in deciding whether further action is required. If you are unhappy with the arrangement, Court action is available.