LawTalk 809 by New Zealand Law Society

LAWTALK MONEY MATTERS.

FEES M O O L A H / CL AM S / BUCKS / DO U G H PAG E 4

23 NOVEMBER 2012 / 809

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INSIDE

THE MAGAZINE

FEATURE: MONEY MATTERS

“I really liked the fact that as an “alternative fee in-house [lawyer] you are much arrangements are closer to the business.” here to stay.” p. 13

p. 6

Vital skills for lawyering

Be sure to check out our PRACTISING WELL resources at my.lawsociety.org.nz/practising_well

MONEY MATTERS.

By FRANK NEILL

Knowing the law is an “absolute given”, but there are other skills that are vital to lawyering...

20 And the winners are ... The 2012 New Zealand Law Awards were announced at a ceremony in Auckland on 1 November...

How to move between in-house and out-house

Seeking immunity for anti-competitive conduct

By RACHAEL BRECKON

By JOHN LAND

Sole-practitioner Genevieve Hancock says her legal advice is “that much richer from having been an in-house counsel...

An interesting and important issue is whether it is still possible to seek full immunity from penalty action by the Commerce...

Civil pecuniary penalties under spotlight

NZ well placed to structure treaties carefully

The Law Commission is seeking submissions on its recently published issues paper, Civil Pecuniary Penalties...

By FRANK NEILL

New Zealand is well placed to apply lessons learned from international arbitration...

Principal incomes hold edge – over teachers at least Back in 1980 the average net income before tax for a principal in a New Zealand law firm was $31,099...

24 Branch News

Mastering the art of pricing

Overseas innovation – from the top

By RACHAEL BRECKON

The global financial crisis has changed the way the world does business, and professional services have not been immune...

The modernisation of legal services is an issue that is front of mind for firms of any size worldwide...

People in the law

Law Reform Report

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LAWTALK 809 / 23 NOVEMBER 2012

FROM THE LAW SOCIET Y G R ANT ADAM

he role of an in-house lawyer continues to develop both nationally and internationally.

The in-house section of the New Zealand Law Society, CLANZ, is committed to ensuring that New Zealand’s in-house profession is represented worldwide and is up to date with the latest issues. CLANZ section manager Helen Mackay recently represented New Zealand’s in-house lawyers at the in-house Counsel Worldwide (ICW) meeting in Hong Kong. ICW is in the process of formally being established with a membership base. The purpose of ICW is to unite the global in-house community for the benefit of all in-house counsel, their organisations and the legal profession, and provide professional development and cultural support through co-operation and collaboration. One of the larger issues arising worldwide is the recent decision of the European Court of Justice that in-house lawyers are not sufficiently independent to represent their employers before European Courts. It also prevents in-house lawyers from lodging proceedings on behalf of their employers. This adds to the anti-in-house lawyer attitude in the European Union that saw in 2011 the loss of legal privilege. ICW intends to set up a work group to help ensure this kind of attitude does not infect other shores.

Trans-Tasman relationships are also integral to the development and progression of the in-house profession. Recently CLANZ, in conjunction with the Australian Corporate Lawyers Association (ACLA), released the 2012 Legal Department Benchmarking Report. The report outlines the behaviours found in leading in-house legal practice. The primary characteristic identified in 89% of top legal departments is that the most senior in-house lawyer in the organisation sits on the leadership team. This further reinforces the business value of in-house lawyers. Representatives of CLANZ met with ACLA during the ACLA conference on 7 November 2012 to progress our bi-lateral relationship and work together on issues of common interest. It was great to see so many in-house lawyers recognised for their hard work and contribution to the legal profession at the New Zealand Law Awards held earlier this month. CLANZ had two tables at the awards and it was exciting to see the Public Law Award go to in-house lawyer Rosalie Cus from the Ministry of Social Development. For a list of the law awards winners go to page 10 of this issue of LawTalk. The in-house profession has a strong membership, making up over 20% of lawyers and is a vital part of the New Zealand legal framework.

Grant Adam CLANZ President

LAWTALK More than 12,000 copies of LawTalk are distributed each issue. The magazine of the New Zealand Law Society, LawTalk is sent to every lawyer in New Zealand who holds a current practising certificate. Although the number of lawyers with practising certificates varies, it is typically around 11,500. Others who receive LawTalk include members of the judiciary, Law Society associate members, legal executives, Members of Parliament, media, academics and others involved in the legal services industry.

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Coming up … Litigation conference The Law Society of Singapore is organising a litigation conference which will be held on 31 January and 1 February 2013. This two-day conference aims to bring together the judiciary, senior practitioners and industry experts across various jurisdictions to provide fresh insight on the latest developments in this area of practice. A wide range of contemporary topics will be discussed, including access to justice, due process, cross-border litigation and the future of litigation as compared to the future of arbitration. For more information contact cpd@lawsoc.org.sg.

Creative and sustainable cities The Environmental Law Committee of LAWASIA is holding its first Conference on Building Creative and Sustainable Cities – Setting the legal and policy framework. The conference will be held in Chiang Mai, Thailand, from 23-24 February 2013. The aim of the conference is to examine the legal and policy framework that is required to build creative and sustainable cities. The focus will be on cities with populations of less than two million people. See http://lawasia. asn.au/lawasia-conferences.htm.

Financial law The inaugural Asia-based International Financial Law Conference: West meets East will be held in Shanghai from 28 February-1 March 2013. This conference is co-presented by the International Bar Association (IBA) Banking Law Committee and the IBA Securities Law Committee, with the

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CLIENTS WITH The views expressed in LawTalk are not necessarily those of the New Zealand Law Society. Articles may be reproduced provided acknowledgment is given to LawTalk.

LAWTALK 809 / 23 NOVEMBER 2012

ACC DISPUTES? JOHN MILLER LAW

Level 1, 13 Leeds St I PO Box 6314, Wellington +64 (04) 801 5621 I info@jmlaw.co.nz www.jmlaw.co.nz

support of the IBA Asia Pacific Regional Forum. The aim of the conference is to review, from the Asian, European and American perspectives, the changing legal environment in which the Asian financial market operates, through the use of comparisons and case studies. See www.ibanet.org/Conferences/ conferences_home.aspx.

Arbitration master class The ICC Institute Masterclass for Arbitrators will be held in Hong Kong from 7-9 March 2013. This International Chamber of Commerce (ICC) Institute of World Business Law masterclass will provide participants with an opportunity to gain a deeper insight into some of the new provisions of the 2012 ICC Rules of Arbitration while learning about the latest developments and best practices related to serving as an international arbitrator. See www.iccwbo.org/.

Access to justice The Law Council of Australia’s National Access to Justice and Pro Bono Conference will be held in Melbourne on 21 and 22 March 2013. The fourth biennial conference will bring together prominent Australian and international speakers and delegates to discuss current and emerging issues and challenges for access to justice, the legal assistance sector and pro bono services. Just one of the many topics will be How to present a child’s case on a legal aid budget. The Law Institute of Victoria and the National Pro Bono Resource Centre join the Law Council of Australia as conference hosts. See www.a2j13.com.au/.

• Wish to refer them to a specialist ACC law firm? • With nationwide coverage? • We deal with ACC matters only and will not represent your clients in other areas.

LAWTALK 809 / 23 NOVEMBER 2012

MONE Y MAT TERS reduction in profits,” the white paper states.

“Companies that actively pursue pricing as an important part of their strategy, typically outperform their peers on several financial metrics.”

In the article Should a law firm be like an airline? published in legal magazine Of Counsel in October 2012, Kennedy Helm III, chair emeritus of Stites & Harbison (United States), uses the example of the airline discount to look at the consequences law firms can suffer when they compete on price.

The New Zealand environment

Business development and marketing director at Kensington Swan, Andrew de Boyett, says the firm uses a variety of billing techniques depending on customers.

“We are aware of the pressure on many clients to contain or reduce their external legal spend, and we work with our clients to provide pricing options that best fit their needs,” he says.

“Those options include hourly rates, discounted hourly rates, fixed fees, and volume rebates. We employ a scope and estimate approach for each instruction, provide blended rates to ensure work is completed at an appropriate level, and agree billing and invoicing frequency options so that clients have comfort that appropriate oversight is provided.”

Mastering the art of pricing

As part of its pricing structure, the firm also provides a number of value added services, such as legal updates and access to know-how.

By RACHAEL BRECKON

Martin Wiseman, chairman of DLA Phillips Fox, admits the global recession has caused hourly rates for almost all legal practices around the world to decline.

The global financial crisis has changed the way the world does business, and professional services have not been immune. But competitiveness is not as simple as cost cutting, especially when it comes to a product that is as variable as the individual provider. Lawyers around the world are navigating solutions that give more pricing certainty to clients, while maintaining and growing profit margins. Evaluating price competitiveness and client satisfaction is vital to staying in business. As Walmart founder Samuel Moore said: “There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” For lawyers dealing with business that needs more financial security, this could mean making the billable hour a thing of the past. Although the demise of this pricing structure has been touted for years, the big firms worldwide have latched on to using alternative pricing structures in order to stay competitive over the economic downturn. In New Zealand, the 2011 University of Waikato Management Research Centre Law Firm Practice Comparison found

LAWTALK 809 / 23 NOVEMBER 2012

that 59% of the responding firms used value billing. The survey defined this as: “quote or estimate to clients an upfront price based on the ‘value’ of work to be performed (different from charging on billable hours worked)”. However, research focused outside the main centres paints a very different picture. A recent survey of rural practitioners by the New Zealand Law Society and consultants Ashley Balls and Simon Tupman found that 67% of respondents used time-based billing, 19% used value-based and 14% used a fixed price. The Altman Weil Law Firms in Transition Survey 2011 polled managing partners and chairs at 805 United States law firms with 50 or more lawyers. Completed surveys were received from 240 firms including 38% of the 250 largest United States law firms. The survey found alternative fee arrangements (charging practices not based on billable hours) were used by 95% of all law firms, and by 100% of firms with 250 or more lawyers. The amount of non-hourly billing in 2010, measured as a percentage of revenue, increased in 58% of all firms, and in 81% of firms with 250 or more lawyers.

Despite the prevalence and growth of alternative fees, only 12% of firms reported that non-hourly projects were more profitable than hourly billing. An additional 37% reported them to be about as profitable as projects billed on an hourly basis. Two thirds of law firms reported that their use of alternative fee arrangements was primarily reactive in response to client requests. Only a third offered alternative fee arrangements proactively as a means of creating competitive advantage. This appeared to increase profit margins as firms that were proactive in their pursuit of non-hourly business were more than twice as likely to report higher profitability on non-hourly projects compared with firms that were reactive.

“Businesses throughout the world, including New Zealand, which have been affected by uncertainty of demand, have looked to manage their spend on legal advice. As a consequence, nearly all legal firms have had to ‘meet the market’ on hourly rates,” he says.

Mr Helm poses the question: “Wouldn’t it be better to have [staff] doing something, even if it means working at a deeply discounted rate and even if it means reinstituting a practice area the firm had abandoned because of its low rate structure? Isn’t that better than having lawyers sitting around twiddling their thumbs? That’s what the airlines do. They sell lots of seats at different prices rather than have the seat go begging.” He cites Geoff Colvin’s book The Upside of the Downturn (Emerald Group Publishing Limited, 2009), which identifies four problems with price cutting as a strategy. •

To break even the price cutter must work significantly harder, and generate a lot more business. (Colvin’s example: if prices are cut 20%, it requires 25% more hours simply to maintain the status quo.)

•

Price cuts harm the firm’s reputation and its perception as a high-quality enterprise.

•

Once the price is cut the lowest price becomes the reference price.

•

Once a price is cut, it is hard to recover because clients “hate price increases more than they like price cuts.”

DLA Phillips Fox has used this changing market to its advantage, according to Mr Wiseman.

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“Throughout the recession, we have continued to grow with increased revenue, increased long-term client numbers and growing partner numbers.” The firm has “not focused solely on hourly rate; rather it’s on the value we can add over a long-term relationship,” he says.

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“One way we work is on a long-term basis, for annual fees,” he says. “Some of our relationships with annuity clients have continued for 20 years. It’s an efficient way for businesses to plan, at the same time ensuring they have access to top quality legal advice from a full service firm.”

According to the survey, alternative fee arrangements are here to stay. The majority of firm leaders expected current pricing trends to be permanent.

The firm also leverages off its alliance with global law firm DLA Piper to negotiate worldwide fees for clients.

The Deloitte Review (Issue 11, 2012) The price of pricing effectiveness: Is the view worth the climb? emphasises the fiscal importance of a good pricing strategy.

Jim Hassett and Matt Hassett of United States legal business development company LegalBizDev warn against price cutting in their 2012 white paper Legal pricing in transition: How client demands and alternative fees are changing the way that law firms price their services.

“Great companies do pricing very well,” it says. “One study suggests that pricing has two to four times the potential to

“The most common response to client cost pressure is to simply discount the hourly rate, but most lawyers do not understand that a ‘small’ discount can lead to a large

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LAWTALK 809 / 23 NOVEMBER 2012

MONE Y MAT TERS

“

Unlike an airline, which downgrades the service it gives to lower paying customers (leg room, films, food), Mr Helm says: “No so-called ‘business law firm’ that [he is] aware of has ever suggested to a client that, as a condition of receiving a cut in hourly rates, he or she will be relegated to the law firm equivalent of tourist class. “So, law firms that pursue the airline strategy have the worst of both worlds. They charge less, but all their clients, regardless of what they pay, receive services from the same lawyers and staff,” he says. “Reducing hourly charges simply reduces the bottom line derived from those clients who are paying less, while leaving the law firm with the same cost structure and exposing it to all of the dangers cited by Colvin.” Mr Helm argues that price cutting is a “dangerous band-aid” that does not “address the fundamental problem law firms are trying to solve.” Richard Burcher, managing director of Validatum, has termed this “suicide prices” in a recent article Suicide Prices – The Coming Crisis at ‘Big Law’. He says an increasing number of major law firms are quoting suicide prices just to get business that will keep their lawyers occupied, even though the firms can’t make money on the work. “If you continue to believe that the road to financial salvation lies in pitching for everything that rears its head, with a proposal that effectively says: ‘we’ll match and beat any competitor by 10%’ good luck with that; the damage to the brand and the long-term financial health of the firm will be incalculable,” he says.

Value pricing In their white paper, Jim Hassett and Matt Hassett define value pricing as: “In value pricing, you start with the price the customer is willing to pay and control your costs to live within that price. Many lawyers believe that value pricing will lead to higher prices and profits and sometimes it can. However, the intense competition in today’s legal

alternative fee arrangements are here to stay.

”

Altman Weil Law Firms in Transition Survey 2011 marketplace is reducing the number of clients who are willing to pay a premium for value.” The authors cite Ron Baker’s book Implementing Value Pricing: A Radical Business Model for Professional Firms (John Wiley and Sons Ltd 2010) where he lists eight steps to implementing value pricing. These steps include: •

Conversation: engage in genuine communication to find out exactly what the customer needs.

•

Value council: Baker suggests every firm has a value council that considers the results of the conversation and considers the best strategy for pricing each matter.

•

Developing and pricing options: create several options based on the conversation to get the client to think about what is really of value for him and help the firm close a deal.

•

Present options to the customer.

•

Customer selects option: this is memorialised into a fixed price agreement.

•

Proper project management: the firm must manage the matter to live within the agreed-upon price.

•

Scope creep and change orders: there must be plans in place for changes in price and scope when requirements change.

Mr Burcher emphasises the importance

of coming to a fair fee when using value pricing in a July 2012 blog post ‘Value Pricing’ – Capitalist Acts Between Consenting Adults.

Overseas innovation – from the top

“I have heard value pricing variously described as ‘what the client will stand’, ‘making up a figure’, ‘hourly billing plus some more’, ‘ask the client what they think it is worth’,” Mr Burcher says.

By RACHAEL BRECKON

“Firms are deluded if they think that their future lies in this sort of approach, lacking as it does, any honesty, integrity or rigour.” A fee could run to several hundred thousand dollars yet still be perceived by both the client and the firm as ‘fair’ – even exceptionally good value – while a fee of a few hundred dollars might be seen by the client as a ‘rip-off’. An hourly rate of $100 could be unfair and poor value from the clients’ perspective, while an extrapolated hourly rate of $3,000 may be a ‘steal’, he explains. Mr Burcher lists the following characteristics of a fair fee. •

It is the result of a collaborative and ‘upfront’ conversation with the client.

•

It is the result of the client, not the lawyer, choosing the most appropriate pricing methodology for their circumstances, that also ‘works’ for the lawyer.

•

The client has been closely involved with scoping the job from the outset.

•

The selected pricing methodology addresses the client’s unique value drivers (which can change from job to job even with the same client).

•

There is an attempt to achieve a measure of alignment between the result and the fee and not just the effort and the fee.

•

The fee strategy reflects a demonstrable alignment of both the lawyer’s and the client’s interests.

•

The lawyer must be fully rewarded to their satisfaction for the effort expended, the results achieved, the value delivered and the risk assumed in undertaking the work. LT

The modernisation of legal services is an issue that is front of mind for firms of any size worldwide.

industries and offers options to suit all clients.”

Virtual services

The firm has instituted an organisationwide pricing group, run by its CFO, which centralises the price decisionmaking and aligns it to the firm’s strategy; and it has also entered into a research programme with Cranfield School of Management to ensure its options are original and effective, the Financial Times says.

This year’s Corporate Strategy winner was virtual law firm Axiom, for being the “first business to offer a real alternative to the law firm model.”

On its website, Addleshaw Goddard explains its pricing model as being built out of “the global economic challenges of the past three years.”

The firm segments work into three forms of engagement: insourcing; outsourcing; and projects.

The firm has launched a Transaction Services Team, a unique in-house team of its kind in the United Kingdom, recruited to focus on and carry out the administrative and process tasks found in major client assignments, but which do not need to be done by qualified lawyers.

The annual Financial Times Innovative Lawyers 2012 research paper released in October looks at how top European firms are adapting to meet changing market needs. LawTalk takes a look at the world’s most innovative law firms.

According to the Financial Times, the firm offers “a radically streamlined cost structure” that enables it to offer lawyers at half the rates of law firms. It was the sixth most innovative firm overall.

New pricing model United Kingdom law firm Addleshaw Goddard was “highly commended” in its “new and uniquely comprehensive approach to its pricing, which shows impressive learning from other

They are also “actively deconstructing a number of our transactions and clients’ assignments to identify more efficient ways to deliver them to clients.”

Gender and ethnic diversity

oriented people strategies. This approach has also seen it named leading private sector employer and the only law firm in the United Kingdom’s top 10 companies for race and gender equality. International law firm Ashurst was also “commended” for its gender equality strategy. It is committed to “tackle the gender inequality in the profession”, according to the Financial Times. It has set itself a target of having 25% of its management positions filled by women by 2014. Currently, 14% are filled by women.

Use of major event International law firm Freshfields Bruckhaus Deringer was highly commended for its use of partnering with the London Olympic Games 2012 to “significantly enhance” the brand and give it an integral role in the games and the city. After the Olympic Games, Freshfields was named the strongest legal brand by global research firm Acritas. LT

Global law firm Eversheds received a “stand out” award on its diversity-

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PEOPLE IN THE L AW

PEOPLE IN THE LAW Law firms and practitioners are invited to send in announcements of appointments, promotions, retirements or other information for this column. You may also send photos (preferably colour) in hard copy, on disk or by email in JPG format scanned at 300dpi. Items should be sent to LawTalk, DX SP20202 or PO Box 5041, Lambton Quay, Wellington 6145, ph (04) 463 2982, fax (04) 463 2985, email editorial.lawtalk@lawsociety.org.nz. The usual editorial discretion applies.

PEOPLE Napier solicitor Russell Collins has been appointed a District Court Judge with a jury warrant. He will be sworn in on 10 December in Napier and will sit in Auckland. Judge Collins was admitted in 1988 after graduating from Victoria University with arts and law degrees. He initially worked for eight years in management positions in the thoroughbred racing industry in both Australia and New Zealand. Since admission, he has practised almost exclusively in litigation. A partner of Napier firm Elvidge and Partners, he was appointed Crown Solicitor at Napier in 2002 and Gisborne in 2006. While his practice has involved work in the Civil and Family Courts, criminal cases have dominated in recent years. Jury trials, in both the District and High Court, initially as defence counsel and then as a prosecutor, have been a constant part of his workload. During secondment to the Crown Law Office in 2011, he appeared regularly for the Crown in the Court of Appeal. Auckland lawyer Jonathan Down has been appointed an Acting District Court Judge with general and jury warrants. Judge Down will be sworn in on 14 December in Auckland and will sit in Hastings. Judge Down is an experienced criminal barrister with a background in United Kingdom and New Zealand criminal law. He was admitted in England/Wales in 1993 and in New Zealand in 2005. He briefly practised as a barrister from Vulcan Chambers (August to December 2008) and was an associate and Senior Crown Prosecutor at Meredith Connell from 2005-2008, responsible for complex and high profile criminal matters. Since late 2008, Mr Down has been the Public Defender in the Northern region. He was the convenor of the Auckland District Law Society’s Criminal Law Committee from 2007-08 and commenced an LLM in public law this year. Judge Down’s UK background includes practising as a barrister, a Police Officer and a missionary. Wellington lawyer Guy Royal has been appointed a director of NZ Railways Corp (KiwiRail). Auckland barrister Miriam Dean QC has been reappointed a director of Crown Fibre Holdings Ltd. State Owned Enterprises Minister Tony Ryall announced the appointments on 8 November.

LAWTALK 809 / 23 NOVEMBER 2012

Master Rufus Black from Ormond College receiving a cheque for $10,000 from Multilaw’s global chairman, Mark Lowndes.

New Zealander Mark Lowndes, as global chairman of Multilaw, presented a donation for $10,000 to The Ormond College, Melbourne University, to establish an indigenous residential bursary. The managing partner of Lowndes Associates presented the donation to Master Rufus Black of Ormond College at Multilaw’s annual conference in Melbourne on 20 October. Multilaw lawyers made their third donation of the year under the Multilaw Billable Hour Project (a component of the Multilaw Pro Bono Mission), whereby Multilaw raises funds from members to make significant cash donations to local charities selected by each conference hosting firm and the Multilaw Academy. The bursary will support an indigenous student at Ormond College studying at Melbourne University in 2013. “We are very enthusiastic about setting up this one-year Multilaw scholarship for an indigenous student,” Mark Lowndes says. “We understand indigenous Australians continue to be under-represented in higher education, and in collaboration with Ormond College’s commitment and vision to foster the next generation of indigenous leaders, this scholarship can improve employment and economic opportunities for an indigenous student.” Janice Fredric, chief executive of Duncan Cotterill Lawyers, has received the 2012 Aspiring Directors Award, presented by the Canterbury Branch of the Institute of Directors. This award is open to those wanting to become directors, and focuses on helping to hone governance skills. Ms Fredric helped lead Duncan Cotterill through a sustained programme of strategic growth during her nine-year tenure with the firm. She leaves at the end of the year to concentrate on furthering her directorship and advisory roles.

ON THE MOVE Anchali Anandanayagam has joined technology and intellectual property law firm Hudson Gavin Martin as a senior solicitor. Anchali advises clients on arrangements in the telecommunications, media and technology sectors including technology procurement, outsourcing, commercialisation and services arrangements. Before joining Hudson Gavin Martin, Anchali was senior legal counsel for Pacific Fibre Ltd, the company established to build a fibre optic cable network connecting Australia and New Zealand to the United States. Lane Neave has made three appointments recently. Yue Wang has been appointed an associate. Yue focuses on immigration law and is part of the immigration team based in Christchurch. Siobhan O’Shea has been appointed a senior solicitor and joins Lane Neave after moving south from Auckland. Based in the Queenstown office, Siobhan has experience in employment, commercial and corporate issues. She also has an interest in intellectual property and ICT law, including drafting website terms of use, privacy policies and other internet-based contracts. Alexia Khan has been appointed an associate. Ali has been an in-house counsel for Solid Energy for four years and returns to Lane Neave’s Christchurch office, focusing on commercial property matters. Michael Moyes has joined the partnership of commercial firm Anthony Harper, to head up its specialist practice areas of telecommunications, media & technology, and intellectual property. Michael’s broader practice will continue to include energy, procurement and privacy.

Hesketh Henry has appointed Mary Joy Simpson and Kate Telford partners of the firm. Mary Joy, who heads the firm’s private client team, practises in estate planning, trusts, relationship property and estate management. Kate’s principal area of practice is corporate and commercial law, with a particular focus on mergers, joint ventures and shareholders’ agreements.

Philip Bremer has been made a partner of Grimshaw & Co. Philip, who joined the firm in December 2010, has experience in commercial and civil litigation, employment law and dispute resolution. Grimshaw & Co has also appointed three new associates: Lucy Chapman, Rebecca Harvey and Charles Lane. Lucy, who joined the firm in January 2010, specialises in leaky building and insurance claims. Rebecca, who joined Grimshaw & Co in July 2011, specialises in leaky building disputes claims. Charles, who joined the firm in January 2009, specialises in construction disputes and insurance claims. Megan Alexinas has joined Dawson & Associates, the Nelson based maritime law practice, as a senior associate. Megan will be providing strategic and legal advice to marine industry businesses, particularly on their commercial dealings and interactions with government agencies. Megan was previously senior prosecutor with the Ministry for Primary Industries (and with the Ministry of Fisheries), specialising in fisheries law (commercial, recreational and customary), including prosecutions and vessel forfeitures. She also has detailed knowledge of the new Search and Surveillance Act 2012. Donna Llewell has established in sole practice as Llewell Rangimarie Law, based in the Bay of Plenty. Donna recently returned to New Zealand after one year of voluntary work advising the Autonomous Region of Bougainville Government on constitutional, land issues and customary law. Before this, she was Crown Counsel in the Treaty & International Law Team of Crown Law. Donna has over 16 years’ legal experience, spanning both the public and private sectors and advising New Zealand and South Pacific governments. Her practice will specialise in resource management and environmental law, public administrative law, Māori land, customary law and Treaty of Waitangi issues. LT

Independent Resource Management Specialist Advice, strategy, advocacy, dispute resolution for your clients Waterfront Chambers Wellington

Philip Milne Barrister

021 803 327 or PA 04 499 6653 philip.milne@waterfront.org.nz milnelaw.co.nz

LAWTALK 809 / 23 NOVEMBER 2012

PEOPLE IN THE L AW

LAW REFORM REPORT

And the winners are … The 2012 New Zealand Law Awards were announced at a ceremony in Auckland on 1 November. Organised by NZ Lawyer magazine, the awards celebrate and reward excellence in client service by law firms and barristers, as judged by their clients, and by in-house teams as judged by their legal peers. More than 2,000 clients voted in this year’s eighth New Zealand Law Awards.

Recent submissions: The Law Society recently filed submissions on the: • Marine Legislation Bill; • Joint Family Homes Repeal Bill (principal and supplementary submissions);

The winners and runners-up in this year’s awards were:

• Commerce (Cartels & Other Matters) Amendment Bill (supplementary submission);

Large Law Firm of the Year Winner: Minter Ellison Rudd Watts; first runner-up: Simpson Grierson; second runner-up: Kensington Swan.

ASB Mid-size Law Firm of the Year Winner: Cavell Leitch Law; first runner-up: Lane Neave; second runner-up: Cooney Lees Morgan.

Kay Hoult (left) giving an acceptance speech while Johan Niemand (right) of Niemand Peebles Hoult holds the Team Factors Boutique Law Firm of the Year trophy at the2012 New Zealand Law Awards. Kay and Johan were regular visitors to the dais at the event, with Kay winning one award and the firm adding three more victories. Jackie Clark (centre) was the MC.

Royal Reed, Prestige Lawyers; group winner: Manawatu Community Law Centre.

LEADR NZ Mediator of the Year Team Factors Boutique Law Firm of the Year Winner: Niemand Peebles Hoult; first runner-up: Swarbrick Beck Mackinnon; second runner-up: McBride Davenport James.

Crombie Lockwood Regional/Suburban Law Firm of the Year Winner: Niemand Peebles Hoult; first runner-up: The Law Company Ltd; second runner-up: Botherway Legal.

ComplyWith In-house Counsel Team of the Year Winner: Z Energy Ltd; first runnerup: Transfield Services (NZ) Ltd; second runner-up: Genesis Energy.

Barrister of the Year Winner: Kate Barry-Piceno; first runner-up: Greg Blanchard; second runner-up: Philip Skelton.

Legal Personnel Employer of Choice 101+ category winner: Duncan Cotterill; 51-100 category winner: Lane Neave; 1-50 category winner: Downie Stewart; Overall winner: Downie Stewart.

The College of Law Community Service in Law Award Individual winner: Geoff Mirkin, Wilkinson Adams; special mention:

LAWTALK 809 / 23 NOVEMBER 2012

Winner: Geoff Sharp; first runnerup: Deborah Clapshaw; second runnerup: Warren Sowerby.

NICHE Banking and Finance Law Winner: Gerard Dale, Lane Neave; first runner-up: Simpson Grierson; second runner-up: Cavell Leitch Law.

Thomson Reuters Infinitylaw Corporate and Commercial Law Winner: Lowndes Associates; first runner-up: Gerard Dale, Lane Neave; second runner-up: Holland Beckett Lawyers.

Hays Employment Law Winner: McBride Davenport James; first runner-up: Swarbrick Beck Mackinnon; second runner-up: Chen Palmer.

Family Law Winner: Niemand Peebles Hoult; first runner-up: Ronayne HollisterJones Lellman; second runner-up: Cavell Leitch Law.

Prendos Property and Construction Law Winner: McBride Davenport James; first runner-up: Queen City Law; second runner-up: Finn Collins, Gibson Sheat.

Marsh Insurance Law Winner: Gilbert Walker; first runner-up: Morgan Coakle; second runner-up: Lane Neave.

Canon Intellectual Property Law Winner: Baldwins Intellectual Property; first runner-up: James & Wells Intellectual Property; second runner-up: Duncan Cotterill.

SLS Litigation and Dispute Resolution Winner: Kay Hoult, Niemand Peebles Hoult; first runner-up: McBride Davenport James; second runner-up: Gilbert Walker.

LexisNexis Public Law Winner: Rosalie Cus, Ministry of Social Development; first runnerup: Chen Palmer; second runner-up: Victoria Casey, Crown Law Office.

Resource Management and Environment Law Winner: Kate Barry-Piceno, barrister; first runner-up: North South Environmental Law Ltd; second runner-up: Cavell Leitch Law.

CCH Tax Law Winner: Geoffrey Clews; first runner-up: Stephen Tomlinson, Tomlinson Law; second runner-up: Denham Martin.

• Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill; • Prohibition of Gang Insignia in Government Premises Bill; • Legal Assistance (Sustainability) Amendment Bill (supplementary submission); • Social Security (Benefit Categories and Work Focus) Amendment Bill; • Crown Minerals (Permitting and Crown Land) Bill; • Takeover Panel’s Draft Guidance Note – schemes of arrangement and amalgamation under Part 15 of the Companies Act 1993; • Civil fees review; and • Privileges Committee inquiry into a question of privilege (following Attorney-General and Gow v Leigh). The Law Society recently addressed the following select committees: • Commerce Committee, 18 October, on the Companies and Limited Partnerships Amendment Bill; • Commerce Committee, 25 October, on the Commerce (Cartels and Other Matters) Amendment Bill; and • Law and Order Committee, 7 November, on the Prohibition of Gang Insignia in Government Premises Bill. The submissions are available at http://www.lawsociety. org.nz/publications_and_ submissions/submissions.

Criminalisation of breaches of directors’ duties could impact economy Proposed legislation that would criminalise breaches of directors’ duties could have a negative impact on the economy, the Law Society says. The introduction of criminal liability for breaches of directors’ duties – as a “backstop” to civil liability – is intended to penalise and deter dishonest directors, but the Law Society is concerned the Companies and Limited Partnerships Amendment Bill does not make dishonesty an element of the offence. Law Society Commercial and Business Law Committee member Ross Johnston presented the Law Society’s submission on the bill to the Commerce Select Committee. “By not clearly limiting the offences to those involving dishonesty, New Zealand risks discouraging legitimate risk-taking and, thereby, discouraging the types of innovation and entrepreneurship that are pivotal to business development,” he said. “This same risk saw Australian policymakers seek to strike a balance between discouraging undesirable behaviour, and facilitating responsible risk-taking and innovation and ensuring honest and competent people are not deterred from becoming company directors for fear of damage to their reputations. “The strong correlation between good governance and productivity would make any government wary not to (inadvertently) deter competent and honest candidates from governance roles. “The SME sector in particular needs good governance inputs from people with experience (and mana). By creating uncertainty, there seems to be the very real prospect of discouraging the sort of strong hands on the tiller that are needed.

“Where only criminal sanctions are available to address behaviour, arguably lacking a criminal level of blameworthiness, a reluctance by the courts to convict might deter the regulator from bringing cases to prosecution, as the outcomes are uncertain and the costs for the tax payer potentially substantial.” The Law Society noted that directors who breached their duties were already subject to substantial and effective sanctions, including damage to their reputations and civil liability to compensate where losses were caused by the breach of a relevant duty. “The wave of successful prosecutions against certain directors of a number of failed finance companies illustrates the adequacy of the existing criminal law provisions,” Mr Johnston said. The Law Society is concerned that the bill raises the prospect of compounding the existing difficulties with the reckless trading prohibition in the Companies Act, by adding a criminal backstop to that sanction. The problems with the wording of the current prohibition are well known in that it appears to penalise directors for taking risks, even if those risks are legitimate, Mr Johnston said. “The language provides little or no guidance to directors as to the point at which a decision should be made to stop trading.” Rather than risk compounding these difficulties, the Law Society suggests that the underlying legislation is in need of serious revision. “Without it, Parliament runs the risk of having the courts undertaking a ‘reverse engineering’ exercise to try to cure the problems of the underlying language, making the situation worse in respect of both penalisation and deterrence,” Mr Johnston said.

Cartel criminalisation – clarity needed The Commerce (Cartels and Other

LAWTALK 809 / 23 NOVEMBER 2012

L AW REFORM REPORT Matters) Amendment Bill should be clarified to give greater certainty to people in business acting in good faith, Law Society Law Reform Committee member Andy Nicholls said when presenting the Law Society submission to the Commerce Select Committee. In its submission the Law Society suggested improvements that will increase certainty for legitimate business activity. “The Law Society believes criminalisation of cartels is a significant development in competition law, and when making this change it is important that there remains certainty for bona fide business people,” Mr Nicholls said. “For example, the bill proposes a safe harbour for genuine collaborative arrangements. However the particular wording used in the bill will exclude from the safe harbour a range of bona fide activities such as franchise arrangements. “These are arrangements between competitors or parties that would otherwise compete. Yet these arrangements are legitimate and frequently pro-competitive as they provide a platform for the participants to compete vigorously in the market.” The Law Society also suggests that the bill should be changed so business arrangements are assessed at the time they are entered into, rather than being subject to the risk of a revised assessment later on. “The current proposal exposes legitimate business people to an accusation that an arrangement that was bona fide at the time it was entered into is now not reasonably necessary, and for this reason they are cartelists,” Mr Nicholls said.

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LAWTALK 809 / 23 NOVEMBER 2012

Given the significance of the change introduced by the bill, the Law Society has recommended that it be reviewed after five years.

Prohibition of Gang Insignia in Government Premises Bill 2012 could breach rights The Prohibition of Gang Insignia in Government Premises Bill is inconsistent with the right to freedom of expression protected by the New Zealand Bill of Rights Act 1990, the Law Society says. The bill prohibits the display of gang insignia in government premises. Presenting the Law Society’s submission on the bill to the Law and Order Select Committee, Law Society Human Rights and Privacy Committee member Robert Hesketh has said the bill should not proceed past select committee stage. If it does proceed, the Law Society recommends that key provisions be redrafted. Although it does not comment on the policy underlying the bill, the Law Society believes the bill is drafted too widely and breaches the right to free expression – as was the case with similar measures enacted in 2009 to prohibit the wearing of gang insignia in the Whanganui District. The Law Society also believes the bill is unnecessary. There are already a variety of existing laws covering the actual behaviours the prohibition of gang insignia was designed to address. The Law Society says the prohibition would limit a range of free speech, including culturally or politically significant expression which may not be intimidatory or confrontational. “Gang insignia” is widely defined in the bill and does not differentiate between displays of insignia that are intended to intimidate or confront, and displays that are not. If the bill is to proceed, the Law Society recommends that the definition of “gang insignia” should include the requirement that the signs, symbols and representations that display gang affiliation would also tend to intimidate the public or incite confrontation between gangs. The Law Society also recommends the offence should be changed to state that no person may display gang insignia at any time in government premises where such display could reasonably be seen as giving rise to a real risk of the occurrence of intimidation, harassment or confrontation, Mr Hesketh said.

Coming up The Law Society is currently preparing submissions on numerous bills and government discussion documents. Members are welcome to contribute comments to the Law Reform Committee, specialist committees and sections preparing the submissions. For a full list of upcoming submission deadlines and information about how to participate, visit http:// my.lawsociety.org.nz/law_reform/work_in_ progress. For more information on NZLS law reform activities, contact vicky.stanbridge@lawsociety.org.nz. LT

IN-HOUSE Changing roles – how to move between in-house and out-house By Rachael Breckon

“When I first went in-house from Bell Gully I really liked thE fact that as an in-house you are much closer to the business.” GENEVIEVE HANCOCK

Genevieve Hancock

Sole-practitioner Genevieve Hancock says her legal advice is “that much richer from having been an inhouse counsel.”

“When I first went in-house from Bell Gully I really liked the fact that as an in-house you are much closer to the business,” she says.

The former President of CLANZ, the in-house section of the New Zealand Law Society, Ms Hancock has moved between in-house and “out-house” roles during her career.

“You become very aware of what’s going on and what the business is doing. You are quite a lot more removed as a private outside counsel. I really enjoyed it. It was a very tight-knit team and it was a lot of fun – as well as a lot of hard work.

She began her legal career as a graduate at ACC, before moving on to work for Bell Gully. After nearly a decade at the large law firm, Ms Hancock decided she did not want to attempt to climb the ladder any further. “I decided I didn’t really want to be a partner in a big law firm. That option wasn’t attractive to me,” she says. Combined with a desire to be closer to the industry, Ms Hancock moved back in-house, briefly to Transpower and then as a General Counsel of technology company Unisys for four years.

“I think that really enriches your advice and it makes it much easier to deal with other in-house counsel. You get a fantastic training in a place like Bell Gully to give really fantastic advice.” When Ms Hancock had her eldest daughter five years ago, her career track became centred on her new family commitments. She decided to take up work with the State Services Commission part-time. The combination of the birth of her

third child (six months ago) and the All-of-Government tender for legal work fuelled Ms Hancock’s move back out of an in-house role and into a solepractitioner role. She is now part of legal consortium Best + Hancock, with Richard Best. The firm services government and the private sector and specialises in technology, commercial and public law. “I am meant to be on leave, but I don’t really do that because I practise on my own account. This is my third child so things are a bit crazy,” she says. How does she manage to juggle three children and a career? “I almost feel like saying: ‘I haven’t made a career work whilst being a mother,’” she says. “I do mull that over quite a bit, and I think a lot of my colleagues and friends that are lawyers and parents do as well.

LAWTALK 809 / 23 NOVEMBER 2012

L AND ON COMPETITION L AW

Civil pecuniary penalties under spotlight The Law Commission is seeking submissions on its recently published issues paper, Civil Pecuniary Penalties. Civil pecuniary penalties are monetary penalties, imposed by the High Court in civil proceedings on the balance of probabilities, and payable to the Crown. First used in legislation in 1986, they now appear in 15 Acts of Parliament. These include the Commerce Act 1986, Securities Act 1978, Anti-Money Laundering and Countering Financing of Terrorism Act 2009, and Unsolicited Electronic Messages Act 2007. The commission is undertaking a first principles review of their use and design, with the goal of articulating when and how it is appropriate to include them in legislation. The risks and benefits of an increasing reliance on civil penalties in New Zealand statutes needs to be carefully weighed, the President of the Law Commission and project leader, Sir Grant Hammond, says. For example, under a civil penalties regime, the court does not need to be convinced beyond reasonable doubt before it penalises a defendant. And the defendant does not benefit from protections like the right to silence and presumption of innocence. Also, there

is a risk that civil pecuniary penalties might allow white-collar, corporate offenders to be treated more favourably than those accused of more traditional criminal offending.

•

The first part of the issues paper (chapters 1 and 2) sets out the existing landscape. It defines “civil pecuniary penalties” and examines their current usage and design. It notes that there are inconsistencies in the design of existing civil pecuniary penalty regimes.

•

whether there should be a uniform standard of proof provision;

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whether greater clarity is required as to who carries the burden of proof;

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whether civil pecuniary penalty regimes should recognise a privilege against self-exposure to a non-criminal penalty;

The second part of the paper (chapters 3 and 4) is concerned with the validity of civil pecuniary penalties as a “hybrid” regulatory sanction. Chapter 3 assesses the nature of civil pecuniary penalties against the traditional criminal/civil divide. It concludes that they are a potentially grave form of State sanction which can have serious financial and reputational implications for those subject to them. In this sense they are a hybrid because they are imposed without the benefit of criminal procedural protections. The commission concludes that hybrid sanctions such as these may have a valuable role to play, but that there must be robust policy justifications for their use.

That can be quite a challenge, and I think my career would have been quite different had I not had children.”

Chapter 4 critiques the justifications used to date by policy makers. The commission suggests that it is important that policy makers clearly articulate the arguments in favour of using civil pecuniary penalties, while also addressing their limitations.

Part of the difficulty of legal practice and parenting is the demands that clients make on their lawyer.

The third part of the paper (chapters 5, 6 and 7) is concerned with matters of legislative drafting and design.

“If [clients] expect 18 hours a day to get hold of [their] legal advisor, then nothing changes,” she says.

Chapter 5 identifies three guiding principles that should underpin the design of a civil pecuniary penalty regime: fairness; the effective enforcement of regulatory regimes; and certainty. The application of the New Zealand Bill of Rights Act 1990 to civil pecuniary penalties, particularly the right to natural justice under s27, is discussed.

Technology, however, does help being a professional and a “mindful” parent. “One great advantage of tech companies, and I do quite a lot of work in technology law at the moment, is people that work in technology are quite used to flexible working and the tools of the trade suit flexible working,” she says. “They do really help women working in the law, because people are used to dealing with people on the phone, or on the mobile, or skype.” LT

LAWTALK 809 / 23 NOVEMBER 2012

Chapters 6 and 7 cover a number of detailed design issues. They set out the current range of legislative approaches and ask a series of questions. Chapter 6 contains “critical” design questions, specifically:

whether there should be a general provision stating that the usual rules of civil evidence and procedure apply in civil pecuniary penalty proceedings;

•

how statutes containing civil pecuniary penalties should address the risk of double jeopardy; and

•

what role mens rea, fault or moral blameworthiness should play in the statute and in establishing a statutory defence.

Seeking immunity for anti-competitive conduct By John Land* In this issue of LawTalk, we begin a series by Auckland barrister John Land on competition law. An interesting and important issue is whether it is still possible to seek full immunity from penalty action by the Commerce Commission for anti-competitive conduct when you are already subject to a commission investigation. Is it too late once the commission has started an investigation? Let us consider an example. Your client, Remuera Piling & Drilling Ltd, has been approached by the Commerce Commission. The commission has asked your client probing questions about a number of recent tenders that Remuera Piling & Drilling has been involved in. The CEO of Remuera Piling & Drilling, Dave, comes to see you. “It’s a difficult market at the moment, you know. I’ve tried to encourage the other drillers that we don’t have to incur the expense of preparing a full tender for every project. So on some of those tenders I’ve just put in a price that I knew from talking to the others wouldn’t win the job. And the others did the same thing on other tenders.”

Chapter 7 contains other design issues, including: •

how, and by whom, civil pecuniary penalties should be imposed;

•

who should be able to seek them;

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how penalty maximums are set in legislation;

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appeal rights and the application of s66 of the Judicature Act 1908; and

•

limitation periods and the application of the Limitation Act 2010.

The final chapter asks whether the commission should recommend guidance for policy makers contemplating the use of civil pecuniary penalties, such as a chapter in the Legislative Advisory Committee Guidelines. It also asks whether there is a need for legislative change. Might amending legislation be needed to remedy existing inconsistencies in the legislation? And/or might there be a need for legislation containing model civil pecuniary penalty provisions? The commission invites submissions on the issues paper, which is available on its website, www.lawcom.govt. nz, by Friday 15 February 2013. The commission intends to release a final report in June 2013. LT

You have formed the view that these arrangements form what is sometimes called “cover pricing” and that the drillers have likely breached the Commerce Act (s27 via s30).1 You explain to Dave that the maximum penalties for breach of the act are high. For the company these are up to $10 million or three times the gain obtained by the company, or if the gain is not ascertainable, 10% of its turnover. For Dave personally the maximum penalty is $500,000. You also let him know that he is lucky that the new Cartel Criminalisation Bill2 has not come into force yet. Otherwise, Dave might have been at risk of criminal prosecution. The bill provides for jail terms of up to seven years. Dave looks visibly sick. Is there anything you can do to save him and Remuera Piling & Drilling? The answer is perhaps. The commission’s leniency policy3 provides in certain circumstances for a participant in a cartel to obtain full immunity from claims by the commission. The participant needs to be the first participant in the cartel to disclose the existence of the cartel to the commission. The participant must also meet certain other conditions (including full co-operation with the commission). You tell Dave about the leniency policy. “But the commission already knows about this! They are already investigating me so surely the leniency policy doesn’t apply?” For a recent Australian case involving cover pricing see ACCC v Woollam & Sons Pty Ltd [2011] FCA973 (24 August 2011). 1

2 Commerce (Cartels and Other Matters) Amendment Bill 2011. The bill provides for criminal sanctions for cartel conduct but clause 2(2) of the bill provides that these sanctions will only come into force 2 years after the act receives the Royal assent.

Commerce Commission Cartel Leniency Policy (as updated on I March 2010).

You explain that under the current version of the leniency policy, the commission may still grant immunity in relation to a cartel that it already knows about. This will only apply where the commission does not have evidence that is likely to warrant issuing proceedings against a cartel member. Further, immunity will only be granted to the first cartel participant to seek immunity and comply with the requirements for immunity (such as co-operation with the commission). Dave is still sceptical: “But these arrangements were all my idea! Surely, if I thought this up I can’t get immunity?” You explain that it doesn’t matter that the anti-competitive arrangement was all Dave’s idea. In New Zealand, there is no ringleader exception to the leniency policy (the position is different in Australia). Accordingly, if Remuera Piling & Drilling is first in time to seek immunity, then it can still obtain immunity. Leniency would only not be available if Remuera Piling & Drilling had “coerced” the others into the arrangement. You explain that time is of the essence. It is only the first participant to seek immunity that can obtain immunity. You advise Dave that you should immediately make a hypothetical “no names” enquiry to determine whether immunity is still available for him and the company. The hypothetical enquiry is made to the commission’s general manager – enforcement. Immunity may not be available if the commission has received an immunity application from one of the other drillers. It also won’t be available if the commission already considers that it has sufficient evidence that is likely to justify issuing proceedings. Dave asks you if there are any downsides of seeking immunity. You explain that Remuera Piling & Drilling will need to co-operate with the commission and will likely have to provide evidence against any other drillers. You also point out that obtaining immunity from claims by the commission does not mean immunity from claims by the company’s customers who may have been overcharged. You suggest that if Remuera Piling & Drilling does proceed with an application under the leniency policy that this be done by way of a “paperless” process. An important aim of the paperless process is to avoid creating written admissions of breach of the act that could be relied on by other parties. If written admissions are created, they might be accessed on discovery by customers bringing a damages claim. You again reiterate to Dave that time is of the essence. The other drillers have probably also been contacted by the commission and may also be seeking legal advice as to their position. A race to the commission’s door seeking immunity may be about to commence.4 *John Land is a senior competition law specialist and commercial litigation barrister at Bankside Chambers in Auckland. He was formerly a partner of Kensington Swan for 20 years. 4 For more detail as to the process taken in leniency applications, and the potential pitfalls involved see John Land & Tom Weston QC “Competition Law – Must Knows”, NZLS CLE Ltd Seminar, May 2012, Chapter 18 (Commerce Commission Leniency Applications).

LAWTALK 809 / 23 NOVEMBER 2012

NZ well placed to structure treaties carefully By FRANK NEILL New Zealand is well placed to apply lessons learned from international arbitration, according to one of the top practitioners in the field, American Lucy Reed, who visited New Zealand this month.

you want to regulate health and public interest, but you are going to have to pay us for the damage to us, Philip Morris, for all that investment in intellectual property that we are no longer able to take advantage of.

International arbitration is “a young legal field, which, of course, has had its moments of adolescence but a lot of things are becoming clearer, more rational, more predictable, more transparent”.

“Australia is saying in future when we enter into investment treaties with countries, we are not going to agree with this binding arbitration mechanism, because it is interfering with our right to regulate in the public interest without having to pay.

New Zealand, she says, is in a “very good position” as it does not have a lot of treaties that it can’t get out of. “It’s got a free choice, with the benefit of all this information and learning that has built up over the last 20 years.” New Zealand, therefore, has the ability “to draft and structure treaties carefully to avoid the problems that the enemies of investment arbitration like to latch onto.” And that is important, “because we are on the cusp of the TPP, the Trans Pacific Partnership agreement. “There will be a chapter that requires arbitration, most likely, rather than going to the national courts ... and so New Zealand is going to have to decide whether to jump in or not to jump into this form of treaty.” One of the cases pending right now in international arbitration highlights the issue. International tobacco company Philip Morris has made very big investments in selling cigarettes in Australia. Australia will be the first country in the world to require tobacco products to be sold in plain packaging. The new legislation will be implemented throughout the country next month. With treaties that include binding arbitration, an investor can go against the state, Ms Reed notes. “Philip Morris is saying if that’s how we have to sell all of our tobacco products in Australia (in plain packaging), you are taking away our intellectual property. You are taking away decades of our investment in name recognition, branding, quality, that give us competitive edge. “As a government, you can do what

LAWTALK 809 / 23 NOVEMBER 2012

“

we’re always looking for really solid commercial arbitrators from neutral countries, who speak English, because that’s mostly the language used, who are well trained and independent first-rate judges.

”

LUCY REED “New Zealand has very few free trade agreements or treaties that have this type of arbitration. At the same time, Australia is saying no more of these … It’s saying to its investors you’re on your own … You’re just going to have to go to courts in the (relevant) countries because it’s reciprocal.” New Zealand, Ms Reed says, would be an excellent source for top arbitrators and she would like to see 10 New Zealanders in the next decade taking a leading role in international arbitrations and treaty arbitrations.

Two or three New Zealanders are already “very prominent” on the international arbitration stage, says Ms Reed. She mentioned three: David Williams QC, Campbell McLachlan QC and Sir Kenneth Keith, although he is due to retire soon. [Who’s Who Legal (2005) listed Mr Williams as one of the world’s outstanding commercial arbitrators, and the 2007 Global Arbitration Review listed him as one of London’s “super arbitrators”. Professor McLachlan is a top writer in the field. He has conducted numerous international arbitrations under ICC, UNCITRAL and LME rules, and has represented or advised a number of sovereign states, including Armenia, Chile, Cuba, Malawi, New Zealand, South Africa, Tuvalu and the United States of America. Sir Kenneth is a judge of the International Court of Justice.] “I do think if we could get 10 really experienced New Zealanders we would be really happy. “In international arbitration … we’re always looking for really solid commercial arbitrators from neutral countries, who speak English, because that’s mostly the language used, who are well trained and independent firstrate judges. “So we like to look to Canada, we like to look to Australia, we like to look to New Zealand. “These are great countries, with your resources and your background and your legal traditions, to provide topgrade, neutral, independent, culturally and legally sensitive arbitrators, particularly for Asia as the Asian economy grows.” Ms Reed, the global co-head of the international arbitration group at Freshfields Bruckhaus Deringer, says she has worked with so many young New Zealand lawyers in international arbitration.

from New Zealand legal education, but it seems a very solid education.”

lead to a lot of arbitration, not just domestically but internationally.”

She was also very impressed with young lawyers from Australia. “They are some of our best lawyers in the Freshfields network. The Australians and New Zealanders really stand out.”

It’s a small practice, however, “and I never think it should be overblown”.

While New Zealand does not have much experience in international arbitration yet, it will become of more interest, Ms Reed predicts “There will be more and more international legal contracts,” she says. At least up until now, New Zealand’s big law firms had tended to go for not having compulsory arbitration clauses in cross-border contracts. The main reason for that was because New Zealand courts were predictable. “New Zealand has a lot of trade, has a lot of international contracts for sure, and so private arbitration clauses can

“I think that New Zealand is a country that doesn’t need a lot of it. But the skills underlying it – negotiation skills, settlement skills, litigation skills, advocacy skills, civil procedure, and the substance of knowledge of international law, treaty network, the sales network and trade law – are part of a good international legal education anywhere. “A lot of the skills come with general legal education … and understanding the difference between civil law and common law,” she says. Ms Reed was in New Zealand from 6-9 November at the invitation of the Arbitrators’ and Mediators’ Institute of New Zealand, Victoria University and Auckland University, with support from

the New Zealand Law Foundation. She honed her international arbitration skills working for the United States Department of State in The Hague, Iran and the Korean Peninsula. She also sat on the Eritrea-Ethiopia Claims Commission and directed the Claims Resolution Tribunal for Dormant Accounts in Switzerland. Ms Reed chairs the Institute for Transactional Arbitration and serves on the LCIA Court and ICC Arbitration Commission. She is a past president of the American Society of International Law. While in Wellington, Ms Reed delivered the inaugural New Zealand Law Foundation International Dispute Resolution Lecture at Victoria University on 7 November. The title of her lecture was New Zealand Old & New: International Arbitration and Trade. LT

Vital skills for lawyering By FRANK NEILL Knowing the law is an “absolute given”, but there are other skills that are vital to lawyering, according to top-ranked international lawyer Lucy Reed. Two important areas Ms Reed identified during an interview with LawTalk were emotional intelligence and communication skills. “Everything we do, I don’t care if you are a securities lawyer or a foreign practices lawyer or a litigator, you have to understand relationships. “You have to know what’s going on in these disputes, deals, contracts. “It certainly takes emotional intelligence, even in the most commercial deals, to figure things out,” she said. So, how much of lawyering, then, is law and how much is psychology? That depends on the situation, Ms Reed said. Sometimes it was 50-50, other times it was 75-25. The balance would vary.

That includes her work as co-director of the Claims Resolution Tribunal for Dormant Accounts in Switzerland (the Holocaust Tribunal).

Learn to write well

“They’re so well trained. I know they’re probably some of the top graduates

“Communications skills in writing are most important for practice.”

“

Everything we do, I don’t care if you are a securities lawyer or a foreign practices lawyer or a litigator, you have to understand relationships.

”

LUCY REED

The ability to communicate well orally was important, but the ability to communicate well in writing was “especially important”, she said. In lawyering, you need to be able “to write clearly and succinctly in active voice, (using) short paragraphs, knowing where you’re going. “Depending on legal tradition we get the opposite, which is page-long sentences (laced with words such as) hereinafter, therefore, has been decided, ultra vires.” It was very important for lawyers to make their writing really understandable and clear. “Telling a story is, to me, very important.” Another important attribute was the willingness to work very long hours when necessary. In many situations, cultural awareness was also very important. The need for cultural awareness came up frequently in cross-border disputes. Learning a second language, she said, was very advantageous also and something she would recommend young lawyers consider doing. LT

LAWTALK 809 / 23 NOVEMBER 2012

PROFESSIONAL INDEMNITY Rural lawyers and sole practitioners in NZ By Damian Schade* The recent LawTalk edition on The Rural New Zealand Lawyer got me thinking about some of the specific professional liability risks faced by rural lawyers in New Zealand as well as sole practitioners in our smaller towns.

Damian Schade

Three of the main risks to consider are advising outside your area of expertise, avoiding conflicts of interest and succession planning.

One of the biggest risks and cause of numerous professional indemnity claims is when lawyers advise outside of their specific area of expertise. When you are part of a large firm and have numerous colleagues to refer to, the probability of you advising outside your area of knowledge tends to reduce. When you are a rural lawyer, however, or a sole practioner, there may be a tendency to try and be the one-stop shop for your client. You do not have experienced colleagues to refer to and in an attempt to provide the best possible service you stray into legal areas that you do not have enough expertise to be advising on. If you predominantly do conveyancing, trust and matrimonial work you should tread cautiously when asked to advise on banking or insolvency. Over the last few years there have been a number of claims where, with hindsight, the lawyer involved has agreed they should have referred the work to someone with more experience. Conflicts of interest spring to mind when it comes to rural lawyers or sole practioners. This is a very real risk and some of the largest liability claims in recent times have come from

conflict of interest type scenarios. We certainly recommend that you avoid a conflict of interest at all costs as they are a minefield from a liability insurance perspective. This can become difficult if you are working in a smaller town and you know or act for all of the parties involved. You have to tread with the utmost caution if you advise multiple parties in a transaction, because even if you take all of the necessary steps as set out by Law Society guidelines, professional liability claims still occur, so please tread cautiously and avoid conflicts of interest. Planning for the future of your practice is something that is important to all firms, sole practitioners especially. Make sure that you have a clear succession plan in place for who is going to take over your firm or how you intend to transition your clients. The lack of an effective succession plan can potentially result in work load increasing which, in turn, increases the risks that face us all when we are under pressure of making errors and not providing each client with the appropriate attention. This all adds up to the increased possibility of professional liability claims. These are a few of the more obvious professional liability risks that face rural lawyers in New Zealand so it is important that you are aware and take the necessary steps to try and reduce them. *Damian Schade is Principal, Assistant Vice-President and Solicitors Practice Leader at Marsh. Damian advises professional firms on all areas of risk management and liability insurance. damian. schade@marsh.com.

Changing your LawTalk delivery address If you want to change the address that your copy of LawTalk is sent to, you need to contact the New Zealand Law Society Registry. The LawTalk address labels are generated from the Registry database. If you change your address with Registry, it automatically changes your LawTalk delivery address. There is a form on the Law Society website to do this. It is at www.lawsociety.org.nz/home/for_lawyers/forms/forms/ registry_lawyer_change_of_details. You can contact Registry at registry@lawsociety.org.nz.

LAWTALK 809 / 23 NOVEMBER 2012

COURTS HOLIDAY DATES 2012-13 Urgent Family Court applications over the holiday period Family Courts will provide a national service for urgent applications over the Christmas-New Year holiday period with a duty Family Court judge available in each region (Northern, Central and Southern) and staff available in cluster courts (see bold italics below – all other courts are satellite courts). If the nearest court for filing is a satellite court and it is not open, applications can be filed at the nearest cluster court, which will then forward the application to the duty judge. All courts will notify local practitioners of the particular arrangements for their court and relevant contact details. The date on which each court reopens after the statutory holidays is shown below. It would be particularly helpful for court staff and the duty judges if, between Christmas and New Year, draft orders and warrants were typed and filed with the application. Northern Region High Courts Auckland, Whangarei Close: 5pm, Friday 21 December Open: 9am, Friday 4 January District Courts Auckland, Manukau, North Shore, Waitakere, Whangarei Close: 3pm, Monday 24 December Open: 9am, Thursday 3 January Dargaville, Kaikohe, Kaitaia, Papakura, Pukekohe Close: 5pm, Friday 21 December Open: 9am, Monday 7 January Warkworth Close: 3pm, Friday 21 December Open: 9am, Monday 7 January Note: Closed Wednesday 19 and Thursday 20 December Central Region High Courts Gisborne, Hamilton, Napier, New Plymouth, Palmerston North, Rotorua, Tauranga, Whanganui Close: 5pm, Friday 21 December Open: 9am, Friday 4 January District Courts Gisborne, Napier, New Plymouth, Palmerston North, Rotorua, Tauranga, Hastings, Whanganui Close: 3pm, Monday 24 December Open: 9am, Thursday 3 January Dannevirke, Feilding, Hawera, Huntly, Levin, Marton, Morrinsville, Opotiki, Taihape, Taumarunui, Taupo, Te Awamutu, Te Kuiti, Thames, Tokoroa, Waihi, Waipukurau, Wairoa, Whakatane Close: 5pm, Friday 21 December Open: 9am, Monday 7 January

Southern Region Supreme Court Closes: 3pm, Friday 21 December Opens: 9am, Monday 7 January Court of Appeal Closes: 3pm, Friday 21 December Opens: 9am, Monday 7 January High Courts Blenheim, Christchurch, Dunedin, Greymouth, Invercargill, Masterton, Nelson, Timaru, Wellington Close: 5pm, Friday 21 December Open: 9am, Friday 4 January District Courts Blenheim, Christchurch, Dunedin, Invercargill, Nelson, Masterton, Queenstown, Lower Hutt, Porirua, Wellington, Upper Hutt Close: 3pm, Monday 24 December Open: 9am, Friday 4 January Greymouth, Timaru Close: 5pm, Friday 21 December Open: 9am, Thursday 3 January Alexandra, Ashburton, Balclutha, Chatham Islands, Gore, Kaikoura, Oamaru, Rangiora, Westport, Whataroa Close: 5pm, Friday 21 December Open: 9am, Monday 7 January Special Jurisdictions All Employment and Environment Courts Close: 3pm, Monday 24 December Open: 9am, Thursday 3 January Māori Land Courts Close: 3pm, Monday 24 December Open: 9am, Thursday 3 January

LAWTALK 809 / 23 NOVEMBER 2012

EFFECTIVE PR ACTICE

EFFECTIVE PRACTICE Principal incomes hold edge – over teachers at least Back in 1980 the average net income before tax for a principal in a New Zealand law firm was $31,099. This was the finding of a New Zealand Law Society survey which was carried out by Heylen Research Centre. A secondary teacher at the top of the scale earned $18,054 (PPTA figures) and the overall average salary in New Zealand was $10,436. Lawyers who were able to practise on own account weren’t doing too badly, therefore, when compared with other New Zealanders. The New Zealand Law Society/Momentum Legal Salary Survey 2012 was mainly completed by employed lawyers. However, the survey did capture data on earnings by partners and directors. As there were very few barristers in 1980, the 2012 data on partners and directors can be compared with the 1980 “principals”. In 2012, equity partners/directors had an average income of $244,460 while salaried or fixed draw partners/directors had an average income of $160,552. By comparison, a secondary teacher at the top of the scale apparently earns around $71,000, while the overall average salary in New Zealand is $52,104 (for those in paid employment). For non-principals (ie, lawyers employed in law firms at all levels of experience) the New Zealand average salary was $78,759.

intellectual property (42%) and tax (39%).

information is, therefore, an indication only.

Annual earnings, Legal Salary Survey Measure

2011

2012

Equity partners/directors – average

$186,800

$244,460

Equity partners/directors – median

$158,000

$180,000

Equity partners/directors – range

$13,000 - $700,000

$40,000 - $2,000,000

Salaried and fixed draw partners/directors – average

$142,500

$160,552

Salaried and fixed draw partners/directors – median

$140,000

$142,500

Salaried and fixed draw partners/directors - range

$70,000 - $210,000

$50,000 - $1,000,000

Of the equity partners/directors who responded in 2011, 65% stated that their earnings had not increased. In 2012, 46% of respondent partner/directors had had no earnings increase.

Most in-house use of external firms reviewed irregularly Leading New Zealand in-house legal teams tend to have no set time periods for reviewing their relationships with external legal providers. This is one of the findings of a comprehensive report into key in-house legal practices. The report, 2012 ACLA/CLANZ Inhouse Counsel Report: Benchmarks and Leading Practices, is the result of a survey of 346 organisations in New Zealand and Australia by the Law Society’s CLANZ section and the Australian in-house lawyer organisation, ACLA.

Average annual salaries

The research aimed to identify and synthesise innovative practices in the in-house legal profession. The New Zealand results, from 85 organisations, also provide some very interesting insights into the relationship between in-house teams and law firms in private practice.

Principals

Teachers

NZ average

1980

$31,099

$18,054

$10,436

2012

$160,552

$71,000

$52,104

% Principals 1980

100%

58.1%

33.6%

% Principals 2012

100%

44.2%

32.5%

Increase 1980 to 2012

416.3%

293.3%

399.3%

Partner/director earnings improve from 2011 Data on earnings by partners and directors was also collected in the 2011 Legal Salary Survey. The differences between 2011 and 2012 are unlikely to indicate a sudden upsurge in earnings by partners and directors: instead, there were more respondents and a wider range of earnings in 2012. The

LAWTALK 809 / 23 NOVEMBER 2012

Law firms accounted for 89% of the inhouse legal function’s annual external expenditure, followed by 7% on other expenses such as IT, and 4% with other legal providers.

Is being a lawyer a health hazard?

Recognising that this is indicative only, and taking the (lower) salaried partner average, a comparison of salary parity over the 32-year period shows that law firm principals are doing comparatively much better against teachers and slightly better than the New Zealand average salary.

Measure

The research also looked at interaction between in-house teams and law firms with whom they had ongoing relationships. The most common regular contact was newsletters, with 75% of in-house teams receiving these from their law firm clients. Next was legal expertise or knowledge sharing (59%), 46% of in-house teams had secondee arrangements, and 40% of in-house teams had access to the law firms’ library and resources.

Of the New Zealand respondents, 48% said they reviewed relations with their external legal providers on an “ad hoc basis”. The next-most preferred option – by 19% – was an annual review. When it comes to deciding upon an external law firm, 38% of in-house teams had one or two firms which they used on a regular basis. The next two most common actions were selection “as required” (19%) and use of a list of preferred firms (19%). Asked about the proportions of legal work which are outsourced, the leader by quite a long way was litigation/ arbitration/ADR, with about 60% of in-house work being outsourced instead of being handled internally. This was followed by employment and workplace relations (48%),

Links between occupation and physical or mental conditions has long been the subject of anecdote. It’s a rich field of research for any aspiring PhD candidate, and there is an increasing flood of data on differences between occupations. Apart from a study on smoking carried out by Otago University Medical School, there is little data available which is specific to New Zealand. In the interests of perhaps inspiring further investigation, we’ve tried to New Zealandise some of the international findings.

Weight gain Attorneys and judges were the occupation second most likely to gain weight, according to research reported in June 2012 by United States research company Harris Interactive. This looked at 5,772 workers across a range of industries. They were asked whether they had gained weight in their current job. Travel agents were top and social workers and teachers followed the legal profession in third place. Over half the weight-gaining workers (54%) said it was because they sat at their desk most of the day, and 56% said they ate their lunch at their desk. A relatively high 37% said they ate because of stress. New Zealand appears to have no comparable research into weight gain and occupation. An enterprising journalist on the Otago Daily Times estimated in October 2012 that New Zealand’s adult population collectively weighed over 232,000 tonnes. With 11,333 New Zealand-based lawyers and 208 judges in early November

2012, that means our legal profession would weigh 756 tonnes if they could be placed on a single set of scales. If lawyers and the judiciary follow the national average, 3058 (26.5%) can be classified as obese, while 1712 female lawyers (33%) and 2540 male lawyers (40%) are overweight. In the United States, land of the lawsuit, an obese lawyer is suing his former boss after apparently enduring years of taunts such as “make sure you grab a bite to eat before this one does – he’s been known to clean out a Danish platter” (which was shouted to participants at a meeting).

Longevity South Korea’s Wongwang University Social Welfare department released a study in April 2011 which found that there was quite a marked variance in average life spans by profession. Religious workers lived longest, with an average age of 82. They were followed by politicians and legal professionals (lawyers, prosecutors and judges) were in third place, with an average age of 78. The research used data from 2001 to 2010. The most short-lived were journalists (72), athletes (69) and entertainers (65). The average life expectancy in New Zealand is 82.7 years for women and 78.8 years for men – which tends to place everyone up with or ahead of South Korean lawyers. Whether New Zealand lawyers have an even higher average age is unknown.

Smoking A University of Otago, Wellington study released in December 2011 analysed data from the 1981 and 2006 censuses on “role model” occupational groups and the incidence of smoking. Lawyers and the judiciary did pretty well, with 7.8% saying they smoked in 2006 (down from 19.4% in 1981). Doctors were top, with only 3.6% being smokers

in 2006 (and 14.2% in 1981). At the bottom were prison officers, 28.2% of whom were smokers in 2006 (but still an improvement on the 47.8% in 1981). Overall, 21.7% of all occupations were still smoking in 2006 (compared with 35.3% in 1981). Assuming this rate has held constant – although it is undoubtedly lower six years later – around 900 lawyers and judges are smokers in New Zealand.

Driving A US study by Quality Planning Corp (which verifies information for insurance companies) found that doctors and then lawyers were the occupations most likely to be involved in a traffic accident. One suggested reason was that they worked hard and were more likely to drive while fatigued. The study found that for every 1,000 lawyers there were 109 accidents (and 44 speeding tickets). There appears to be little publicly available data in New Zealand on vehicle accidents and occupation. While some newspapers seem to focus on lawyers caught drink driving, there is no evidence at all to suggest they are over-represented in this.

Psychopathy In his study The Wisdom of Psychopaths: What Saints, Spies, and Serial Killers Can Teach Us About Success, Cambridge University academic Dr Kevin Dutton lists the professions which he believes psychopaths gravitate towards or away from. CEO is top of the list for professions which attract psychopaths, followed by … um … lawyer, and then media, salesperson, surgeon, journalist, police officer and – in eighth place – “clergyperson”. The roles which Dutton believes psychopaths gravitate away from are headed by “care aide”, followed by nurse, therapist and craftsperson. Accountants are tenth on this list. LT

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LAWTALK 809 / 23 NOVEMBER 2012

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Brookers Law Directory

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BROOKERS LAW DIRECTORY 2013

The annual law directory lists most New Zealand lawyers and legal practices. Other information includes arbitrators and mediators, legal executives, notaries public, patent attorneys and details of courts, coroners and tribunals and court fees. (Brookers Ltd, November 2012, 1175-

LAWTALK 809 / 23 NOVEMBER 2012

By Richard Rudman Reviewed by Philip Bartlett* Over the past 20 years or so, since the enactment of the Employment Contracts Act 1991, employment law has been one of the big growth areas in legal practice. Capitalising on this, CCH New Zealand Ltd and the other major legal publishing houses have produced many works dealing either generally with the subject, or more specifically with particular areas. Mr Rudman’s book falls into the former category. Its stated aim is to “make an increasingly complex field of law more accessible to the people it most affects –employers, employees, other workers, human resources and employment relations specialists, union officials, negotiators, people involved in mediation and dispute resolution, and so on”. The book is said also to be used by lawyers, “especially those who are not employment law specialists”, and as a text for tertiary students. Undoubtedly, this guide is a very useful, clearly written and well-indexed and extensively researched work that covers the full breadth of our substantive domestic employment law. But consistent with its targeted readership there is very little on employment law practice and procedure. For the most part, the subjects dealt with follow a logical sequence, starting from an overview of employment law and progressively working through subjects dealing with the initiation of the employment relationship (employment agreements, bargaining, etc) to those dealing with the termination of the relationship and potential sequels (such as personal grievances), then miscellaneous topics towards the end of the work (health and safety, discrimination, privacy, etc). The only moderately puzzling aspect

• Mr Rudman claims in his introduction that employment law would benefit from a review. This is called for due to a number of reasons, including complexity and that employment law is increasingly the province of lawyers. The possibility of all employment law being brought under a single statutory umbrella is put forward. This would be with the aim of making the law “more easily and certainly accessible to the employers and employees affected by it”. However, the author’s criticism of the scattered state of employment law is not developed throughout his book as it could have been by referring to some of the symptoms of complexity (for example, the high costs of litigating, particularly in the Employment Court). Indeed the fact that he has made such a good fist of gathering together all the strands of employment law in one readable and moderately sized volume (under 500 pages) makes one wonder whether there is actually a strong case for the kind of review he is advocating. • Often, points made in the book are illuminated by brief summaries of decisions of the employment institutions. Although this technique works well in most instances, the author does not subject cited decisions to any critical analysis. This may be for the understandable reason that the book is not primarily intended for specialist employment lawyers. However, the result is that, occasionally, a decision will be cited in support of some dubious proposition. An example is Henry v The Warehouse Ltd (at p91 of the text) where the Employment

• In some places, case references could benefit by elaboration to explain how they tie in with related legal principles. For instance, at p239 the text states that in Pou v Alliance Group Ltd the authority held that P (who had been dismissed for non-disclosure of pre-employment convictions and pending charges) “was not obliged to volunteer the information about her criminal record, but would have had to answer truthfully if questioned”. However, it is not explained how the authority’s view was reconciled with a prospective employee’s rights under the Criminal Records (Clean Slate) Act 2004. A reader who is acquainted with that legislation might be left wondering whether the applicant did not satisfy the eligibility criteria under that act or, if she did satisfy them, whether the authority overlooked those criteria. A reader who is not acquainted with the legislation – and this could easily include many of the book’s target group of readers, such as employers and employees – might assume wrongly that an employer has a completely unfettered right to ask questions about a job applicant’s previous criminal record.

Residential Tenancies: The Law and Practice 4th Edition • David Grinlinton

Residential Tenancies Law and Practice, Fourth Edition is an authoritative work providing up-to-date, clear and practical guidance on the law relating to residential tenancies in New Zealand. After 25 years of operation of the Residential Tenancy Act 1986, there is now a significant body of case-law on the Act, including decisions of the Tenancy Tribunal, District Court, High Court and Court of Appeal. These decisions are the primary source of interpretation and application of the Act, and the current edition includes substantial commentary on, and analysis of, this significant body of case-law and the applicable common law principles. The book also discusses the functions and powers of the Tenancy Tribunal, and the important role of mediation under the Act. This work will be of use for landlords and tenants who want a better understanding of their legal rights and obligations, but at the same time will provide an excellent primary reference tool for law practitioners, tenancy adjudicators, mediators, other professionals, and students who need a more detailed in-depth treatment of the subject matter.

About the Author

david Grinlinton Associate Professor of Law BA (Massey), LLB(hons)(Auck), LLM (Western Aust) Barrister and Solicitor of the high Court of new Zealand

david Grinlinton has been at the Faculty of Law of the University of Auckland since 1990, having previously spent time in legal practice. david’s teaching and research interests include real property law, commercial leases, energy and natural resources law. he has published widely in these areas, and is a regular presenter at both local and international conferences and symposia. he contributed to the consultation process for the substantial reforms of the Residential tenancies Act in 2010, and to the current Law Commission proposals for a new Land transfer Act. david was a co-presenter of the new Zealand Law Society Seminars on Commercial Leases in 2000, 2003 and 2008, and The Workings of the Property Law Act in 2012.

Related LexisNexis Titles

• Hinde, Hinde on Commercial Leases, 2011

• McMorland, McMorland on Easements, Covenants and Licences, 2010 • Hinde, Campbell and Twist: Principles of Real Property Law, Academic Edition, 2007. customer.service@lexisnexis.co.nz www.lexisnexis.co.nz

• The book helpfully includes a model individual employment agreement (Appendix 1), but some of the clauses need to be treated cautiously. For instance, the trial period clause (at p387) does not spell out what period of notice of dismissal may be given during the trial period (a well drafted clause would usually specify this). The termination clause would allow the employer to terminate the

Overall, however, despite those criticisms, this book will be a very useful addition to the library of anyone who has a need for a good and comprehensive overview of substantive employment law. However, it is light on matters of practice and procedure, so is not the book to consult if the reader needs to know the principles for, say, awarding costs in the authority or the grounds for seeking a search order from the court. NEW ZEALAND EMPLOYMENT LAW GUIDE, 2012 EDITION by Richard Rudman, CCH New Zealand Ltd, January 2012, 978-0-86475-955-9, 462 pages, paperback ($78 (GST and p&h excl)). *Philip Bartlett is a consultant with Bartlett Law, specialising in employment law, and is an author or co-author of a number of works on the subject that are published by Brookers. Residential Tenancies: The Law and Practice

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of the sequence of topics is that the chapter dealing with the employment law institutions (chapter 4) comes between the chapters dealing with employment agreements (chapter 3) and employment terms for individuals (chapter 5). The sequence may have been better had the discussion of employment institutions followed the Disputes and Grievances chapter (chapter 10). Some other, generally minor, criticisms of the guide are:

employment “by giving notice in the event of other misconduct”. That wording indicates a misconception that an employer could justify a dismissal for misconduct falling well short of serious misconduct (eg, an isolated minor infringement) by merely giving proper notice.

4th Edition • David Grinlinton

The intention of this book is to Guide to Company provide a quick and Liquidation easy reference for anyone providing advice on company liquidation in New Zealand. Coverage includes statutory demands, appointment of liquidators, asset distribution, the powers and duties of liquidators and the liability of the various parties in a liquidation. The book has a sequential structure and contains detailed footnotes to indicate further areas for more detailed research. (LexisNexis NZ Ltd, October 2012, 978-1-927183-44-1, 199 pages, paperback, $92 (GST incl, p&h excl)).

0847, 619 pages, paperback and CD, $104 (GST and p&h excl)).

Relations Authority held that a former employee’s breach of the confidentiality clause in a mediated settlement deprived her of distress compensation that would otherwise have been payable under the agreement. (The Employment Relations Act 2000 confers no express power on the authority to strip a person of the benefits of a settlement agreement, as opposed to imposing a penalty on a party who is in breach.) Another controversial example is New Zealand Copper Granulating Ltd v Ross (at p225) where the authority gave effect to a term that two weeks wages were to be forfeited if the employee left without giving notice. (On the face of things the term arguably imposed a penalty and may therefore not have been enforceable.)

RESIDENTIAL TENANCIES: THE LAW AND PRACTICE, 4TH EDITION Residential 4th Edition David Grinlinton Tenancies: The Law and Practice

By David Grinlinton Reviewed by Amanda Spratt*

When I was a student in Wellington, I left a pot on the stove for long enough that the soldering melted and ran, like drops of mercury, all over the kitchen linoleum. The molten metal burnt through to the floorboards (though thankfully missing my flatmate’s legs). I mistakenly thought I could rely on the landlord’s insurance, but the incident ended up costing me a small fortune in replacement floor coverings. Most of us will have a war story from our student flatting days and, as the foreword to this book points out, an increasing number of us will rent for a number of years yet. Some of us will be landlords and many of us – especially those who practise in property or litigation – will be asked to advise both landlords and tenants on residential tenancy issues at some point in our careers. Residential Tenancies: The Law and Practice is a very handy reference text for anyone who falls into these categories. Small but well-formed, Residential Tenancies: The Law and Practice does exactly what its title says. In eight chapters, it comprehensively covers the

law and the practice of an area of law that has grown significantly since the Residential Tenancies Act 1986 was passed a quarter of a century ago. The author’s goal in re-writing this book – the third edition was published over 14 years ago – was an ambitious one: he wanted to provide a handy practical guide for landlords and tenants as well as including enough detailed commentary and analysis to be useful to academics and practising lawyers. Often, books that try to please everyone end up doing the opposite, but Grinlinton pulls it off. He writes sharply. Sentences are short and to the point. Language is clean and “plain English”, which makes his analysis of the sometimes dreary legal issues easy to read without sacrificing any of the detail. References to court and Tenancy Tribunal cases are comprehensive and abundant and vividly demonstrate how the law is interpreted and applied in practice. The tribunal cases are particularly revealing, showing how the tribunal approaches its duty to determine a dispute according to the substantial merits and justice of the case as much as the letter of the law. The cases also make for lively reading and may remind you of those war stories from flatting days. The chapters take a logical order: chapter 1 summarises the history of tenancy law in New Zealand and some “golden rules” for tenants and guidance for landlords. Chapters 2 to 7 mirror the act, moving from the act’s application to entering into an agreement, bonds and rent, the parties’ rights and obligations and termination. Boarding houses get a chapter to themselves, while chapter 8 is a surprisingly interesting section on the functions and powers of the Tenancy Tribunal, an authority that has exclusive jurisdiction to determine residential tenancy issues but operates quite differently from the courtrooms most legal practitioners are used to. Well-referenced and easy to work around (you can search by case, by section of the act or by topic), Residential Tenancies: The Law and Practice is easy to dip in and out of when the need arises and proves that bigger does not mean better. Small enough to fit in your hand (or man) bag but more informative than many textbooks twice its size, it is very useful text for anyone wanting guidance on a residential tenancy issue. RESIDENTIAL TENANCIES: THE LAW AND PRACTICE, 4TH EDITION by David Grinlinton, LexisNexis NZ Ltd, June 2012, 978-1-877511-00-4, 328 pages, paperback, $92 (GST incl, p&h excl)). *Amanda Spratt is a senior associate with Minter Ellison Rudd Watts in Auckland.

LAWTALK 809 / 23 NOVEMBER 2012

BR ANCH NEWS

BRANCH NEWS

WAIKATO BAY OF PLENTY NEW ZEALAND LAW SOCIETY

NZLS EST 1869

Female lawyers’ evening Female practitioners in Hamilton had a long overdue catch up on Thursday 25 October. The evening attracted 36 women lawyers and was held at Flying Burrito Brothers on Bryce Street Dining Lane. Those attending agreed it was a fun evening – helped along by delicious Mexican food and yummy cocktails. It was agreed by all that these need to be regular events. If there are any female practitioners in the Waikato Region who are not currently receiving email updates about events, please email Sarah Rawcliffe who is the convenor of the group – sarah.rawcliffe@harkness.co.nz.

At the female lawyers’ evening in Hamilton (from left) Anamika Singh, Bogers Scott Shortland; Katrina Hamblin, Hamilton District Community Law Centre; Rose Alchin, barrister; and Raewyn Sporle, barrister.

CANTERBURY WESTLAND

NEW ZEALAND LAW SOCIETY

NZLS EST 1869

Quiz and wine evening The orchestra and choir performing at this year’s Counsel in Concert. Image Soul Focus Photography.

WELLINGTON NEW ZEALAND LAW SOCIETY NZLS EST 1869

Concert a huge success

At his welcome to Wellington, Solicitor-General Mike Heron with Wellington branch President Mark Wilton (left) and Wellington branch Vice-President Rachael Dewar.

Solicitor-General Mike Heron’s welcome speech was preceded by the theme from 2001: A Space Odyssey, one of the most dramatic introductions he has ever received.

Co-hosted by the Wellington Young Lawyers Committee and the Wellington branch, the evening was open to lawyers admitted within the last five years.

Solicitor-General welcomed

Among the members of the bench who attended were Justices Chambers and Glazebrook from the Supreme Court, Justices Arnold, Ellen France and Wild from the Court of Appeal and Justices Kós and Dobson from the High Court.

A “meet the judiciary” evening on 1 November was fully subscribed, with around 60 people attending.

LAWTALK 809 / 23 NOVEMBER 2012

Judge Raoul Neave was the compere for the general knowledge quiz, while Rex Ormandy from Vino Fino compered the wine options section of the quiz.

take away the main prize in the tournament, which features around 60 prizes in total.

The SBS South Island Devil’s Own Golf Tournament proved a huge success this year, despite some weather extremes.

The lunchtime concert was filled to capacity and the evening performance was also very well attended. The audience included several members of the judiciary as well as many members of the Wellington legal and musical community.

Meet the judiciary

Five of the women lawyers who dined in Hamilton on 25 October (from left) Annette Edwards, Harkness Henry; Sandra Braithwaite, Harkness Henry; Jillene Peters, Harkness Henry; Sharon Green, barrister; and Joan Forret, Harkness Henry.

Devil’s Own golf a huge success

The programme featured well-known classical music used in movie soundtracks as well as music written specifically for the movies.

Wellington branch President Mark Wilton welcomed the new incumbent, Mike Heron, who has come to the role from Auckland.

This evening was sponsored by Vino Fino and attracted 13 teams of six.

This year’s event was the branch’s 17th annual quiz evening.

Counsel in Concert 2012: At the Movies was a huge success. The event raised $3,600 for the Child Cancer Foundation, which equals the amount raised last year.

An evening to welcome the Solicitor-General to Wellington on 31 October was fully subscribed, with at least 65 people attending the event.

The Rhone Rangers, a team from Cameron & Co, emerged as the overall winners of the Canterbury-Westland branch wine options and quiz evening on 7 November.

Des Deacon Memorial Dinner The 7th annual Des Deacon Memorial Dinner was held at the Wellesley Club, Wellington on Thursday 8 November. Justice Joseph Williams was the guest speaker at the dinner. Des Deacon, who died in 2004, was a prominent Wellington criminal lawyer and a former President of the Wellington District Law Society.

Among the great turnout of 86 participants was a record number of 11 women golfers. Around 12 players came from the North Island, including Justices Venning and Wylie and former New Zealand Law Society President Chris Darlow. Another dozen or so came from South Island areas outside the host Canterbury-Westland branch. Held at the Methven Golf Club from 2-4 November, the event opened with a Norwesterly gale, so strong one could barely stand on the Friday. Weather of a different nature saw Saturday’s tee-off postponed from 8am to noon. It began snowing at 6am. Fortunately, the ground was warm enough so the snow could not settle, but the ponding did not clear in time for play to begin in the morning. Half an hour before the bus was due to leave the Methven course at 6pm for one of the highlight events of the weekend, dinner at Terrace Downs Resort sponsored by Marsh, hail began falling. Around 6pm, it began snowing again. Sunday, however, dawned a most glorious day, and the Sunday morning round saw Russell Law and Geoff Baxter

The format of the weekend sees the golfing based around the social side, with a big emphasis on networking and collegiality. The event’s major sponsor is SBS Bank, and the supporting sponsors are Harcourts Twiss-Keir Realty Ltd, Chambers Strategy Communication, Marsh, Infinity Law and Bryan Andrews – Auctioneer.

AUCKLAND NEW ZEALAND LAW SOCIETY NZLS EST 1869

Half marathon in colleague’s memory Auckland branch inspector Tim Maffey ran 21kms to “honour his word” to long-time colleague and friend Steve Lewis. Steve Lewis, who was a Law Society inspector for 12 years, passed away on 4 July this year. In April, over a coffee, Mr Maffey had talked to Mr Lewis about his desire to complete the Auckland half marathon. “This turned out to be the only conversation we ever had in which he indicated that there might be something seriously wrong with him and that he might not make it through, which took me back a bit because he had otherwise always been so positive,” Mr Maffey says.

LAWTALK 809 / 23 NOVEMBER 2012

UPCOMING PROGRAMMES

BR ANCH NEWS

Online registration and payment can be made at www.lawyerseducation.co.nz

Programme

Presenters

Content

Where

When

FAMILY The PRA in the GFC – uncertainty in uncertain times

Chair: Margaret Casey

As with the very successful 2010 “Big Day Out” intensive, this Auckland intensive will be a programme for senior and experienced Wellington practitioners that will be intellectually challenging and informative. It will focus on how legal advice in the sphere of family law has been affected by the Global Financial Crisis to provide a relevant and stimulating day out of the ofﬁce.

20 Feb 2013 22 Feb 2013

PROPERTY Trusts for Property Lawyers

Andrew Watkins Simon Weil

A practical seminar focussing on what property lawyers need to know Hamilton about trusts and the use of trusts. To include; why a trust? – their Auckland various uses – their set up, drafting, and legislative requirements, trust busting – inherent weaknesses – what to look for – how to make trusts stronger – the bundle of rights as it affects property lawyers.

26 Nov 27 Nov

The PRA in the GFC – uncertainty in uncertain times

Chair: Margaret Casey

20 Feb 2013 22 Feb 2013

GENERAL Stepping Up foundation for practising on own account

Steve Lewis, David Littlefair and Tim Maffey (left to right) at Terrace Downs Resort the morning after David’s 61st birthday.

“He ran a couple of marathons years ago, and said he would love to be able to do something like that again but he doubted he ever would, so I jokingly offered to run it for him, on the condition that he stayed around and came down to Onewa Road (near where he lived) on the day to cheer me on. He said he’d like that, and that he would come and cheer me on, even if he was in a wheelchair by then!”

Reading Lloyd Austin Accounts and Balance Sheets

Unfortunately Mr Lewis died before he had the chance to see Mr Maffey run the half marathon, so instead he used the event to honour his friend and raise money for the Hibiscus Hospice where Mr Lewis spent his last few weeks, where he was looked after “extremely well”. Mr Maffey asked people to sponsor him a set amount per kilometre he ran. “The last time I did any running, other than to catch the train, was about 30 years ago, and even then nothing arduous,” Mr Maffey says.

SOUTHLAND

OTAGO

NEW ZEALAND LAW SOCIETY

He aimed to use “bloody-minded determination and wanting to honour my word to Steve” rather than athletic prowess or ability to get him across the finish line.

Informal dinner

It proved a winning formula. Mr Maffey “made it” and completed the 21km run.

The Otago and Southland branches held their respective monthly council meetings in Queenstown on 9 November.

“I must confess to walking up a couple of the hills, including most of the uphill bit of the harbour bridge and a couple of little bits towards the end when my old legs were getting a bit past it, but I made it, albeit in a very slow time,” he says.

Each branch was joined by the New Zealand Law Society President-elect Chris Moore, who gave them background on himself and also his vision for the Law Society.

NZLS EST 1869

Following the meetings, an informal dinner was held where both councils were able to catch up and join in some collegiality. LT

All lawyers wishing to practise on their own account whether alone, Auckland in partnership, in an incorporated practice or as a barrister, will be Christchurch required to complete this course. (Note: From 1 October 2012 all lawyers applying to be barristers sole are required to complete Stepping Up). Developed with the support of the New Zealand Law Foundation.

14-16 Mar 2013 13-15 Jun 2013

While it is not necessary for you to have the financial insight that Wellington might be expected of an accountant, you should know how financial Christchurch statements are put together and know how to ask the right questions and identify warning signs, discuss financial statements intelligently with a client, and know when to call in specialist assistance. This workshop will enable you to unlock the mysteries of financial documents.

26-27 Nov (Full) 28-29 Nov

Writing Persuasive Opinions

Judge John Adams Successful opinions are persuasive. Persuasive opinions are Auckland Simon Cunliffe clear, succinct, jargon-free, cogently structured, legally acute and Margot Schwass tailored to the needs of your reader/client. Comprising a mix of presentations and small-group work, this workshop will demystify the practice of writing complex legal opinions. It will provide the opportunity to practise and receive feedback on your writing from experienced tutors in a supportive, creative and enjoyable setting.

12 Dec

Triple Your Memory and Conﬁdence, and Halve Your Stress

Jonathan Robinson For success in today’s world, you have to learn faster, feel confident Auckland working in difficult situations, and overcome stress efficiently and Wellington effectively. Join Jonathan Robinson, psychotherapist from Northern Christchurch California, to learn these skills in a single, fast paced and fun day. A previous participant commented, “This class may be the turning point for making major changes in my career. Excellent!”

11 Feb 2013 14 Feb 2013 15 Feb 2013

Trust Account Supervisor Training Programme

Mark Anderson, John Hicks or David Littlefair, and David Chapman, Bob Eades or Lindsay Lloyd

10 Apr 2013 10 Jul 2013

At the joint Otago and Southland branch Council dinner (from left) Tegs Burt, the Southland branch President; Chris Moore, the New Zealand Law Society President-elect; and Donna Buckingham, the Otago branch President.

He had attempted a 5km fun run a couple of years ago and only managed about 1km before he had to stop and walk the rest.

Mr Maffey raised about $1,100 for Hibiscus Hospice in Steve Lewis’s memory.

Director: John Mackintosh

To qualify as a trust account supervisor, you must complete 40- Auckland 55 hours’ preparation, attend the assessment day and pass all Hamilton assessments. Make sure you register in time to do the preparatory work before the assessment day as listed on the right.

Brochures for CLE programmes are distributed with LawTalk. If you have not received a brochure for any of the programmes listed, please see www.lawyerseducation.co.nz or email cle@lawyerseducation.co.nz or contact CLE information, tel 0800 333 111. 26

LAWTALK 809 / 23 NOVEMBER 2012

OVERSEAS First female CJ The Philippines has its first female Chief Justice after President Benigno Aquino III appointed Justice Maria Sereno as the country’s 24th top judge. In appointing Justice Sereno, President Aquino bypassed Justice Antonio Carpio and three other senior Supreme Court justices who were in the shortlist submitted by the Judicial and Bar Council. The new Chief Justice has been an associate justice since August 2010 and was formerly a law professor.

Stop harassing judges The International Bar Association’s Human Rights Institute (IBAHRI) has called on the Government of Sri Lanka to prevent harassment and intimidation of judges and magistrates In a letter to Sri Lanka’s President, Mahinda Rajapaksa, and to the Sri Lankan authorities, the IBAHRI expressed grave concern about recent threats to the independence of the judiciary and called for the rule of law to be adhered to, and promoted, in Sri Lanka. The letter follows what the IBAHRI describes as “disturbing reports” of a physical attack on the Secretary of the Judicial Service Commission (JSC), Manjula Tilakaratne, on 7 October. The attack came at a time of reported heightened tension between the JSC – an independent body made up members of the judiciary that deal with all judicial promotions and appointments – and the Sri Lankan Government. The attack on Mr Tilakaratne came after reports that Government Minister Rishad Badiudeen directly interfered with the professional duties of, and made threats against, Magistrate A Judeson, of the Magistrate Court in Mannar, in relation to a specific case. Reports further indicate that the minister met with the Secretary General of the JSC in an attempt to secure the transfer of Magistrate Judeson.

Divorce ruling branded ‘cheat’s charter’ Lawyers in England have described a Court of Appeal landmark ruling that an oil tycoon need not hand over to his wife £17.5m in assets held by his companies as a “cheat’s charter”, reports The Gazette, journal of the Law Society of England and Wales. In Petrodel Resources Ltd & Ors v Prest & Ors [2012] EWCA Civ 1395 the court, by a majority, allowed an appeal by companies owned and controlled by Mr Prest against a High Court order requiring them to transfer assets to his wife of 15 years.

LAWTALK 809 / 23 NOVEMBER 2012

In a case the court described as “extraordinary”, two commercial judges, Lord Justice Patten and Lord Justice Rimer, agreed to allow the appeal. “Married couples who choose to vest assets beneficially in a company for what the judge described as conventional reasons including wealth protection and the avoidance of tax cannot ignore the legal consequences of their actions in less happy times,” Lord Justice Patten said. In a dissenting speech, family law judge Lord Justice Thorpe said the ruling represented a radical departure from the principles established by the courts in big money cases. “If the court now concludes that all these cases were wrongly decided they present an open road and a fast car to the money maker who disapproves of the principles developed by the House of Lords that now govern the exercise of the judicial discretion in big-money cases,” he said. Lawyers reacted with surprise to the judgment. James Copson, partner at Withers, said: “The decision is a disappointing one for many wives who confront on divorce a tangled web of companies used to shelter their husbands’ wealth. This ruling puts the genie back in the bottle. The court has effectively sanctioned for other cases the use of what could be perceived by the general public to be a cheat’s charter.” The Gazette said it understood that Mrs Prest intended to appeal.

Future of EU criminal justice A discussion forum on the future of EU Criminal Justice will take place at the Law Society of England and Wales in London on 29 November. The event is open to legal practitioners, members of the public, parliamentarians, academics and other interested groups. It will focus on whether the UK should exercise its “opt-out” of over 130 EU criminal justice and policing measures and, if the “opt-out” is exercised, which measures the UK should seek to try to opt back into. LT

The expert in professional liability and discipline LANE NEAVE LAWYERS CONTACT DUNCAN WEBB:

T 03 3793 720 M 021 244 3346 E duncan.webb@laneneave.co.nz

www.laneneave.co.nz

LAWYERS COMPLAINTS SERVICE LCRO increases fine after lawyer reneges on offer to complainant A lawyer, B, who failed to make good on an offer he made to a client during a complaints investigation has had the level of his fine increased on review by the Legal Complaints Review Officer (LCRO). A Lawyers Standards Committee had reprimanded and fined B for his inaction on the client’s file, and in setting the original fine it had taken account of the lawyer’s offer to let the client use draft proceedings he had prepared. B, however, later failed to give the client the documents.

Facts and complaint B agreed to advise the client on his chances of success if he brought an application under the Costs in Criminal Cases Act 1967. A week later the client sent relevant documents to B, and the following day B took detailed instructions. However, from that point B did nothing further, despite the client’s requests. The client complained to the Law Society, seeking, among other outcomes, the return of the material he had provided to B. B told the standards committee he had been very busy, but conceded this was not a sufficient excuse. He had prepared a draft application and supporting memorandum, which were nearly complete, and he now offered to send these draft proceedings to the complainant for him to use if he wished. He said he would also return the complainant’s own documents to him. The committee found B guilty of unsatisfactory conduct on the basis of several breaches of the Conduct and Client Care Rules: failing to respond to the client’s inquiries in a timely manner (Rule 3.2), failing to inform the client of material and unexpected delays (Rule 3.3), and failing to protect and promote the client’s interests (Rule 6). The standards committee reprimanded B and fined him $1,000. In deciding on penalty it noted that B acknowledged

his wrongdoing, and it also specifically took into account the offer to provide the draft proceedings. The committee also ordered B to pay $750 costs to the Law Society.

On review Following receipt of the committee’s determination, the complainant applied to the LCRO for a review. He sought modification of the determination. It was implicit in the application that B had not returned the complainant’s documents or provided documents B had prepared. The LCRO’s office wrote to B stating that the documents the complainant had provided to him were the complainant’s property and that “he is entitled to have these returned immediately.” Again B did not respond. Following a delay in the review process, a telephone conference was held. B told the LCRO he thought he had already sent all the material he had, but he undertook to the LCRO that he would send the complainant all material that he held on his file or electronically, including the complainant’s own documents and the draft proceedings. Five days later B wrote to the LCRO stating that all documents belonging to the complainant had in fact been returned to him more than a year earlier by track and trace courier. As to the draft proceedings, B was unsure whether he had also sent these, but he said he had sought advice and he maintained now that these documents belonged to him, not the complainant, and that the LCRO did not have jurisdiction to direct him to give them to the complainant. The LCRO dismissed this jurisdictional objection, noting that under s156(1) (h) of the Lawyers and Conveyancers Act 2006 a standards committee (and the LCRO) may order a lawyer “to rectify, at his or her … own expense, any error or omission; or … where it is not practicable to rectify the error or omission, to take steps to provide, at his or her … own expense, relief, in whole or in part, from the consequences of the error or omission”. However, in order not to prolong the matter (by making an order B may

no longer be able to fulfil if he could not locate the documents), the LCRO decided to take the course of increasing the fine from $1,000 to $1,750, after concluding that the standards committee “would have been minded to impose an increased fine if [B] had not made his offer”. The LCRO also confirmed the finding of unsatisfactory conduct. He emphasised that the increase was not imposed on the lawyer for failing to fulfil the offer or for apparently breaching his undertaking to the LCRO, but to recognise that the committee had taken the lawyer’s offer into account when setting the original fine. The LCRO commented on compensation, noting that any compensatory order would be complicated by the fact that the complainant may qualify for legal aid and may or may not proceed with the application. The LCRO also decided to order costs of $600 against B. The LCRO referred to the “significant difficulties” in progressing the review, due to B’s “failures in communication and lack of co-operation”. He said also that as the review application had succeeded, this would also usually result in a costs order.

Fined $5,000 for falsely signing she had PI cover For the second time this year, a lawyer has been censured and fined $5,000 for signing a statement that they had professional indemnity insurance when they did not. The first case was heard by the New Zealand Lawyers and Conveyancers Disciplinary Tribunal, Auckland Standards Committee v ABC [2012] NZLCDT 14. A summary of that decision was published in LawTalk 804, 14 September 2012, p27. In the second case, a lawyer, D, was found guilty of unsatisfactory conduct by a Lawyers Standards Committee after she admitted signing certificates that she had professional indemnity insurance when she did not. The standards committee began an

LAWTALK 809 / 23 NOVEMBER 2012

L AW YERS COMPL AINTS SERVICE own motion complaint following a Law Society inspector’s normal trust account inspection of D’s firm, E. The inspector established that D had completed and signed solicitor’s certificates to trading banks which incorrectly stated that E held professional indemnity insurance. As a direct result of the inspector’s intervention, D arranged retrospective professional indemnity insurance with a retroactive date to when she commenced practice as E. D said she was unaware of the bank requirements over professional indemnity insurance. In her written submission, D said that when she first started signing solicitor’s certificates, she was a staff solicitor under the direction of a partner of the firm she worked for. The specific issue of professional indemnity insurance did not arise. The standards committee said it considered it “somewhat surprising” that D had overlooked the requirement, because the relevant clause in one bank’s certificate was directly above the signature clause. However, the committee accepted her actions were not intentional, or part of a deliberative attempt by D to mislead the banks to whom her certificates were addressed.

L AW YERS COMPL AINTS SERVICE certificate and to be confident that the bank’s specific instructions have been followed.” After referring to the NZLCDT decision in Auckland Standards Committee v ABC, the committee said that it “considered closely whether the subject conduct amounted to misconduct and/or negligence requiring charges to be laid with the New Zealand Lawyers and Conveyancers Disciplinary Tribunal.” On balance, however, the committee resolved that D’s conduct did not amount to wilful or reckless contravention of the practice rules. The committee said it took into account D’s early admission of error and acceptance of responsibility. It also noted an otherwise clean disciplinary record for her relatively short period of practice on her own account. Another relevant factor was that D had obtained PI cover with a retroactive date commensurate with starting practice on her own account, and adjusted her internal procedures for completing solicitor’s certificates, as confirmed by the NZLS inspector. As well as fining her, the committee ordered D to pay the Law Society $1,000 costs. LT

“The committee views a solicitor’s obligations when completing a certificate, including to a mortgagee bank, seriously,” its decision said.

Lawyer threatened disclosure of Falun Gong involvement

“It is incumbent on a practitioner to take special care in giving such certificates to address all aspects carefully and closely and to make any enquiries necessary before completing the certificate.

A lawyer, C, was found guilty of conduct unbecoming after threatening a client’s wife that the Chinese Embassy would be informed of her involvement with the Falun Gong organisation if she did not vacate the family home.

Conduct unbecoming

accounts of A and another person.

C acknowledged he had breached the rules and said he had been naïve to follow his client’s instructions as he had done. He said he had advised his client that his expectations had not accorded with New Zealand relationship property law, but said his client had been resolute about what should be conveyed to his wife. The committee accepted that C had intended to act in his client’s best interests and that the breach was more a serious lapse of judgement than a wilful or reckless act. C’s behaviour, therefore, fell short of misconduct, although the committee still considered the breaches to be serious. C was found guilty of unsatisfactory conduct in the form of conduct unbecoming, under s12(b) of the Lawyers and Conveyancers Act 2006. The committee censured C, fined him $1,000, and ordered him to pay $1,000 costs to the Law Society. It said the penalty might have been higher were it not for submissions from C about some personal matters. LT

Fined for not providing information to liquidators An Auckland lawyer, A, was found guilty of unsatisfactory conduct and fined $1,000 by a Lawyers Standards Committee for failing to provide relevant information requested by liquidators under the Companies Act 1993.

Rule breaches

The complaint against A was laid by the liquidators of a trustee company, B. It related to the actions of A as solicitor for B and for B’s sole director and shareholder, C, in relation to B’s role as a nominee purchaser of an Auckland property.

In a letter to the wife, C had stated, in bold type: “Unless you leave the property within 14 days after the receipt of this letter, [the client] will make a notification to the Chinese Embassy in Wellington, telling them everything he knows about your association with Falungong.”

A property group company entered a sale and purchase agreement with a company, E, of which A was the sole director, and A and C were equal shareholders. Nearly five months later, E assigned the purchaser’s rights and obligations under the sale and purchase agreement to B.

The following people have applied to the NZLS for certificates or approvals.

A Lawyers Standards Committee found that C had breached a number of the Conduct and Client Care Rules. C had:

Admission under Part 3 of the Lawyers and Conveyancers Act 2006

•

The sale and purchase agreement was declared unconditional around two weeks later, on 3 November 2009, with settlement to occur on 2 February 2010.

“A lending bank needs to be able to rely on that solicitor’s

Registry

Canterbury Westland Branch COOMBES Nicola Otago Branch AUSTEN Michael Hubert

•

Approval to Practise on Own Account under s30 of the Lawyers and Conveyancers Act 2006 Auckland Branch FRIAR David James O’BRIEN Michael William SHARPE Toby Greig

The Registry is now advertising names of candidates for certificates of character, practising certificates and approvals to practise on own account on the NZLS website at http://www.lawsociety.org.nz/home/for_lawyers/registry/ applications_for_approval/ Comments concerning the suitability of any of the above-named applicants for the certificate or approval being sought should be made in writing to me by 29 November 2012. Any submissions should be given on the understanding that they may be disclosed to the candidate. Lisa Attrill, Registry Manager Email: lisa.attrill@lawsociety.org.nz, Direct Dial: (+64) (4) 463 2916 Freephone: 0800 22 30 30, Fax: (+64) (4) 463 2989

LAWTALK 809 / 23 NOVEMBER 2012

•

Canterbury Westland Branch VAN MIERLO Dean Vincent

•

threatened to make an accusation or disclosure about a person for an improper purpose (Rule 2.7). The improper purpose here was forcing the wife’s departure from the matrimonial home and thereby promoting a speedy and unequal resolution of relationship property issues contrary to the presumption of equal division of assets on separation; assisted his client in an activity the lawyer knew to be criminal (Rule 2.4); breached the requirement that a lawyer must use legal processes only for proper purposes, and not for the purpose of causing unnecessary embarrassment, distress or inconvenience to another person’s reputation, interests or occupation (Rule 2.3). The committee said C and his client were aware that Falun Gong was illegal in China and that the threatened disclosure could have caused considerable embarrassment, distress or inconvenience to the wife and her family; and breached the requirement that lawyers acting in their professional capacity must conduct dealings with others (including self-represented people) with integrity, respect and courtesy (Rule 12).

The committee decided it should not address whether C had committed the criminal offence of blackmail, as the professional disciplinary process was not the appropriate forum for determining criminal liability.

A GST return was submitted for the November 2009 period and a refund of $444,375 received. This was disbursed to various parties through B’s bank account and through the trust

SITUATION VACANT

B was placed in liquidation by High Court order on 11 February 2011. The liquidators alleged that B was never solvent and did not have finance in place to settle the sale and purchase agreement, which was cancelled by the vendor with a credit note for the deposit issued to the company on 15 March 2010. The liquidators received claims totalling $803,563. The majority of that amount was owed to the Inland Revenue Department as GST. The liquidators sought complete records from A to enable them to analyse and assess B’s position. They were not satisfied that A co-operated adequately. He did attend at the liquidator’s offices and delivered some legal documentation, but did not reply to their letter. In response to allegations that he had borrowed money from other clients and on-lent that money to B, A advised that he had been carrying out that practice for some time and claimed that this was with the approval of the New Zealand Law Society. The liquidators did not receive any response to the notice they issued to A under the Companies Act, seeking provision of documentation. They asked the standards committee to request copies of the documents from A under s147 of the Lawyers and Conveyancers Act 2006 (LCA). Copies of the complaint and the liquidators’ subsequent correspondence were sent to A. He replied, referring to the printouts he provided to the liquidators and the liquidators provided to the Law Society, pointing out that the debt balances were corrected with corresponding credits and that he had not at any time borrowed from the client firm B. The liquidators did not accept A’s explanation and found some aspects of it contradictory. The liquidators sought, in partial resolution of their complaint, that A supply the requested information and repay the commission he took. Although the committee considered that A should have provided the documentation requested, it did not consider it appropriate to require the information the liquidators sought under s147 of the LCA. Such a request was beyond the ambit of the committee’s investigation of A’s conduct. As well as fining A, the standards committee ordered him to pay $500 costs to the Law Society. LT

WILLS KALI PEAUA FUNGAVAKA

Would any lawyer holding a will for the above-named, police officer, who died on 23 August 2012, at Nuku’alofa, Tonga, aged 38, please contact Peter J Tatham, Franklin Law Limited, Solicitors, DX EP177029, PO Box 43, Pukekohe 2340, ph 09 237 0226, fax 09 238 7141, email petert@franklinlaw.co.nz.

ORFEUR GEORGE PARKER

Would any lawyer holding a will for, or having knowledge of a surviving successor of the above-named, late of Kowai Pass, sheep farmer, who owned land at Springfield, Canterbury, born in 1845, who died in 1922, please contact Chris Jones, The Property Group Limited, PO Box 7240, Christchurch 8240, ph 03 363 5091, fax 03 363 5904, email cjones@ propertygroup.co.nz.

PAMELA JEAN WRYT (WORT)

Would any lawyer holding a will for the above-named, formerly Pamela Barrett, late of 404 Ensor Street, Thames, aged 71 years, retired, who died on 25 October 2012 in Thames, please contact P Bromiley, PO Box 35, Thames, 3540, ph 07 869 0040, fax 07 869 0050, mobile 027 699 8320, email phoebe@bromileyloane.co.nz.

PAUL WILLIAM MAJOR

Would any lawyer holding a will for the above-named, late of Lower Hutt, formerly mechanic, latterly part-time delivery driver, who died on or about 19 October 2012, please contact Paul Logan, ARL Lawyers, DX RP42002, PO Box 30430, Lower Hutt 5040, ph 04 566 6777, fax 04 569 3354, email paul. logan@arl-lawyers.co.nz.

LAWTALK 809 / 23 NOVEMBER 2012

Fearon & Co 56x100 ad_BW.qxd:Layout 1

WILLS

LEGAL SERVICES IAN STANLEY MCLEOD

Would any lawyer holding a will for the above-named, late of 9B King Edward Avenue, Papakura, warehouse manager, who died on 30 September 2012, aged 57, please contact Rice Craig, PO Box 72440, Papakura 2244, DX EP76506, ph 09 295 1717, fax 09 295 1710, email stephen.temm@ricecraig.co.nz.

DAVID WILLIAM DUNLOP

Would any lawyer holding a will for the above-named, late of 8 Rowling Place, Cambridge, who died on 12 October 2012, please contact Rebecca Whittall at Cooney Law, Solicitors, PO Box 369, Cambridge 3450, ph 07 823 1555, fax 07 823 2442, email rebecca@cooneylaw.co.nz.

YUK CHUN LI

Would any lawyer holding a will for the above-named, late of Lower Hutt, homemaker, who died on 28 May 2011, please contact Lindsey Mills at John Gwilliam & Co, PO Box 40457, DX RP44011, Upper Hutt 5140, ph 04 527 9727, fax 04 527 9723 email lindsey@jgwilliam.co.nz.

21/8/09

09:02

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SITUATIONS VACANT

Commercial/Property Lawyer

ENGLISH LAW AGENCY SERVICES SOLICITORS LEGAL & TECHNICAL SERVICES CHRISTCHURCH

SOLICITORS Established 1825

A great opportunity for Solicitors – On-going professional development, work/life balance!

Fearon & Co specialise in acting for non-residents in the fields of Probate, Property and Litigation. In particular:• Obtaining Grants of Representation for Estates in England and Wales, Channel Islands, Isle of Man and elsewhere and re-sealing Australian and New Zealand Grants of Representation • Administering English Estates • Buying and selling homes and business premises • Recovering compensation for accident victims • Litigation including Debt Recovery and Matrimonial

The Legal and Technical Services business unit (LTS) of Inland Revenue is seeking a Solicitor with a successful track record and experience in litigation (preferably in both the civil and criminal jurisdictions) as well as an aptitude to undertake complex tax legal work. The depth and breadth of work undertaken is highly rewarding professionally. Successful applicants will deliver quality legal and technical advice under tight time constraints in a fast paced environment and contribute significantly to the delivery of LTS, and Inland Revenue, outcomes.

Our offices are within easy reach of the London Airports and Central London Stations

You will work autonomously and also effectively in a team environment with other taxation and legal experts. As you are a pro-active person who can be relied on to deliver you’ll enjoy finding practical solutions to difficult problems.

VISIT OUR WEBSITE www.fearonlaw.com Westminster House, 6 Faraday Road, Guildford, Surrey GU1 1EA, United Kingdom Tel: 00 44 (0)1483 540840 Fax: 00 44 (0)1483 540844 General Email: enquiries@fearonlaw.com

LITIGATION

Martin Williams

PROPERTY John Phillips

00 44 (0)1483 540841

00 44 (0)1483 540843

mw@fearonlaw.com

ajp@fearonlaw.com

This is an intellectually challenging role working with people like you committed to providing quality outcome. If you are energised by the challenge of resolving a range of difficult legal and tax issues, join us and make a difference.

PROBATE

Francesca Nash 00 44 (0)1483 540842

fn@fearonlaw.com

You will be working in a supportive environment which offers on-going professional development and a good work/life balance.

Regulated by the Solicitors Regulation Authority of England and Wales

Eligibility to hold a practising certificate is essential. This is a full-time position. To apply for this role please go to http://www.ird.govt.nz/aboutir/careers/ and attach a cover letter and CV. For more information please contact Shona Spicer on (04) 890 1548 Applications close at 5pm Monday 3rd December 2012. SITUATION VACANT

LEGAL SERVICES

UK Private Client Services & Estate Administration

• Administration of UK estates • Obtaining Grants of Representation • Contentious trusts and probate • Powers of Attorney • Settlements and Taxation • Wills

Alexia Loughran on +44 (121) 2229277 or alexia.loughran@cobbetts.com

www.cobbetts.com Cobbetts LLP is a limited liability partnership

SITUATION VACANT

Due to the tremendous growth in our workload postearthquake we have a new position for a commercial/ property lawyer. We are looking for a lawyer with 2-5 years post admission experience. As we value highly the strength of our relationships with clients, the successful candidate will, in addition to sound legal aptitude and relevant experience, possess excellent inter-personal skills and a desire to build a practice. We offer a competitive remuneration package and longer term advancement prospects for the right person. We have a great work atmosphere in well located offices in the busy and vibrant Papanui retail area. If this sounds like you please respond with a curriculum vitae to: The Managing Partner, Harmans Lawyers PO Box 5496, Christchurch 8542 Or email graeme.riach@harmans.co.nz www.harmans.co.nz

Passionate, Proven, Professional

Graduate/Junior Lawyer

AUCKLAND OPTIONS Construction Associate – one of NZ’s largest and most reputable building and construction disputes teams has a rare opening for a construction lawyer with around 5 – 8 years experience. Front end (commercial) and back end (contentious) mix. Local and international clients including government, contractors, consultants, insurers, suppliers and local authorities. Diversity, challenge and career progression. Suitable for a construction specialist with either a commercial focus or litigation practice (leaky building). Large firm or specialist boutique experience preferred but all applications considered. Ref: 30805 Insurance – insurance litigation roles are running hot. Contact me in complete confidence if you have experience in this area and are considering a change, either to a larger firm or to a specialised boutique with career progression opportunities. Intermediate and senior level roles available. Ref: 31319

To apply, please send your CV to aucklandjobs@momentum.co.nz quoting the reference number or for further information in strict confidence, please contact Meryn Hemmingsen on (09) 306 5500 or 029 965 8152. 191 Queen Street Auckland P +64 9 306 5500

LAWTALK 809 / 23 NOVEMBER 2012

Harmans is a proud Canterbury law firm that has served the district for nearly 125 years. We have taken a leading role in assisting local businesses and property owners through these recent difficult times.

Richmond, Nelson

Civil/Employment Litigation Partner – join a firm which prides itself on the quality of its advice and on the friendly and warm way it works with clients and staff. A longstanding firm with a strong reputation of respect and integrity, and an opening for a senior civil/ employment litigator looking to move into partnership. You may currently be at the Bar, or have hit the ceiling at your current firm. An attractive package awaits. Ref: 31181

An exciting opportunity to participate in the economic resurrection of Christchurch!

Commercial and Property Solicitor

Cobbetts is a leading UK law firm based in Birmingham, Leeds, London and Manchester. Our private capital team provides sensitive, timely and thorough advice on a wide range of personal matters, including:

For further details, please contact: Jennifer Morries on +44 (121) 2229368 or jennifer.morries@cobbetts.com

SITUATIONS VACANT

40 Mercer Street Wellington P +64 4 499 6161

M O M E N T U M .C O. N Z

Fletcher Vautier Moore currently have a career opportunity for an intermediate to senior lawyer with commercial and property experience. This is a busy and exciting position as you will be stepping into an established and significant client base. The successful applicant will have a proven track record, be very competent and have an excellent work ethic. We will provide the support of a large firm with significant levels of experience in all areas. While the position will be a busy one, we all still maintain a work and life balance ensuring we enjoy all that the sunny Nelson region has to offer. Please send a cover letter and short CV to Sue Gardener, Partnership Secretary by email sgardener@fvm.co.nz www.fvm.co.nz

Public Defence Service, Manukau Vacancy 23513 The Public Defence Service represents legally aided clients in a full range of criminal cases and has a commitment to providing independent high quality, timely, legal advice including providing professional leadership of the duty lawyer service. The Public Defence Service office at Manukau has an opportunity for a graduate or junior lawyer, to join an enthusiastic team committed to providing high quality, timely legal advice and representation. The Manukau office services the District Courts within the Counties-Manukau region. There are also opportunities to be involved in High Court appearances and trial work alongside senior lawyers. In this role, you will be able to commence your legal career in a busy, challenging and supportive environment. Our commitment to training and development includes ongoing mentoring, training, interesting work and a strong collegial environment. As a Graduate/Junior Lawyer, you will be reporting to the Deputy Public Defender, Manukau. You will have completed or be near completion of your professionals and will be due to be admitted to the Bar within a short space of time. You will have a passionate interest in criminal law and a desire to advance your career with the Public Defence Service. You will have strong research and legal writing skills. Please enclose an academic transcript with your application. To apply, please visit our website, http://careers.justice.govt.nz/Pages/Vacancies Applications close Friday, 30 November 2012.

LAWTALK 809 / 23 NOVEMBER 2012

SITUATIONS VACANT

Commercial/Property Lawyer, 4+ years

Partnership Appointment Christchurch

Nelson A member of NZ Law Group, my client who is based in the culturally bustling hub of Nelson is an established and progressive practice succession proong their business. Although a general practice, the rm has strong expertise across commercial and property law. The rm is ideally seeking an up and comer with signicant commercial and general property experience and aspirations for partnership in the immediate future. While the initial focus is to service the current workow, this person must be a natural networker with the ability to develop new business opportunities. They will also demonstrate leadership qualities. This opportunity will ideally suit someone looking to relocate for lifestyle reasons or who has a connection to the Nelson region. If you are seeking career progression without the late nights attached then this is the role for you! For a condential discussion please contact Jennifer Little

My client, a respected and innovative commercial rm is in the market to engage a partner in their leading property practice. This opportunity will suit someone who is either an existing partner looking to relocate home to Christchurch or who has aspirations for partnership and wishes to build their reputation as a leading specialist in property law. Working with high-end commercial and private clients the ideal appointment will bring experience across acquisition, development and nancing. They will either have existing networks within the Christchurch and South Island region or experience in developing new business opportunities and trusted relationships. Given the senior nature of the position strong leadership qualities and the ability to manage staff and workows is essential. In return you will be part of a highly engaged and supportive team situated in brand new premises close to the city. With the resources, know-how and talent this property team is well positioned to be at the forefront of the Christchurch rebuild.

at Jennifer@hrshop.co.nz and reference J000035.

For a condential discussion please contact Jennifer Little at Jennifer@hrshop.co.nz and reference J000038.

For more information on HR Shop view www.hrshop.co.nz

0508 HR SHOP / Level 1 - 182 Vivian Street Po Box 7031, Wellington South