THIS WEEK’S ARTICLES
Issue 10 16 Apr 2021
Costs balloon in criminal cultural reports p1
Key definitions missing from the govt’s housing package p3
How output restriction can be criminal cartel behaviour p5
LawNews adls.org.nz
CRIMINAL LAW
Costs balloon for offenders’ cultural reports By Rod Vaughan
A $3 million blowout in the cost of ‘cultural reports’ that judges consult before sentencing criminal offenders has reignited the debate about the value of these reports and whether they are being used simply to obtain sentencing discounts.
Cultural reports are intended to give the court the background and context to the offending. But there is a perception in some quarters that they have spawned a highly lucrative industry of report writers, some of whom are not qualified for the job. An online search reveals their charges can range from $700 to $6,600 for each report. Independent justice advocate Ruth Money believes the $3m would be better spent on rehabilitation. Seeking a report has become almost automatic, she says, “and as long as you can show some nexus between the offending and the background, then judges are routinely giving a 10% to 15% discount from the starting point”. There are also claims that the reports, which can result in offenders getting significant discounts in their sentences, may be little more than cut-andpaste excuses drawn from a handful of templates. But those in favour of cultural reports say they offer valuable insights on an offender that must be considered by the court. In that camp is long-time Mongrel Mob member Harry Tam of H2R Research & Consulting, which has completed 31 s 27 cultural reports to date. Tam
Photo by David Hallett / Staff / Getty Images
Between 2019 and 2020, the number of cultural reports jumped sharply, from 346 to 1557, with the cost rising from $639,311 to $3.3 million. Ordered under s 27 of the Sentencing Act 2002, the reports are primarily funded by taxpayers and invoiced through the Ministry of Justice. They are separate from, and additional to, the pre-sentencing reports provided by the probation service.
By focusing on the background to offending, cultural reports can result in significant discounts on prison sentences
We know whakapapa and authentic connection is a powerful means of assisting in rehabilitation, so we should fund that, not report writers who have set up a business to make money from the process
told LawNews he believes they are valuable for defendants in terms of sentencing and ongoing rehabilitation. “The reports assist the court to develop a better understanding of the defendant’s causes of their offending and the steps they have taken and the support they have to address their offending behaviour,” he says. “They provide an opportunity for the defendant to have their background and circumstances taken into account by the court at sentencing. “And if the defendant is sentenced to imprisonment, the report remains on their file and the information can be helpful for the Parole Continued on page 2
CRIMINAL LAW
Costs balloon for offenders’ cultural reports Continued from page 1 Board which may direct the defendant to complete particular rehabilitation programs before being eligible for parole.” Tam says many offenders are illiterate and inarticulate and have often been alienated from society. “Because of these factors, they often need people who are sufficiently skilled to draw out and share their background stories. They also need people who can help articulate their narratives and put their offending behaviour into context for the court to make fully-informed decisions. “In our opinion pre-sentence reports have limited ability to provide an adequate picture of the defendant as probation officers may only have limited time to spend with their clients to complete their reports.”
Ruth Money
Harry Tam
decision-making.”
Money says her main concern about cultural reports is they are not monitored to ensure that the authors are qualified to write them let alone whether offenders are prepared to commit to rehabilitation.
Tam says there is an important distinction between pre-sentence reports and s 27 cultural reports. “The pre-sentence reports are to provide the courts with formal advice from a statutory agency. Their predominant focus is to advise the court on what it considers to be the appropriate sentence, factoring in the level of risk that person poses to community safety, their ability to comply with a sentence, issues of restitution and victim’s needs. “However, s 27 reports are predominantly focused on looking at the disadvantages that may have contributed to the person’s offending behaviour and options to address it,” he says. “Thus, the findings in a s 27 report can counterbalance the pre-sentence report’s recommendations (see Poi v R CA379/2019 and Wilson v R CA380/20). “After the court is informed of the background disadvantages of the offender, it may reduce the severity of the sentence to home detention or another community-based sentence instead of imprisonment.” Tam also takes issue with suggestions that the $3m spent on cultural reports would be better put towards offender rehabilitation. “We believe this argument is disingenuous as $3m is a drop in the ocean regarding the costs of rehabilitation. Also, the reports provide valuable insights that can inform what rehabilitative processes might be effective which can inform
Pre-sentence reports But Money questions the value of s 27 cultural reports, contending that much of their content is already covered in pre-sentence reports. “Anyone who has been a regular attendee of court over the years knows full well that judges have always considered mitigating factors such as those outlined in these reports,” she says. “I one-hundred-percent support the intention of s 27 as a mechanism within the system to assist with an understanding of why the offender offended, but the sad and in fact devastating reality is that they all sound incredibly similar and end up with a discount to the sentence anyway. “I guess my point is that if this is the reality in practice, which I see it is, why are we spending a huge amount of public money to write a report that says what we know to be true? “I would rather the offenders have [a] ‘routine discount’ and the money spent on their rehabilitation. We know whakapapa and authentic connection is a powerful means of assisting in rehabilitation, so we should fund that, not report writers who have set up a business to make money from the process.”
LawNews
Editor: Jenni McManus
LawNews is an official publication of Auckland District Law Society Inc. (ADLS).
Publisher: ADLS Editorial and contributor enquiries to: Jenni McManus, phone 021 971 598 or email jenni.mcmanus@adls.org.nz Advertising enquiries to: Darrell Denney, phone 021 936 858 or email Darrell.Denney@adls.org.nz
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“And yes, I acknowledge there are many genuine and qualified people writing these reports, but there are also people who are not. It’s hard not to be cynical about this and see it as a money-making exercise for some people. “I know of some people who spend hours with whanau and write good, thorough reports for free but others really are just ‘cut-and-paste’ and easy money.” Significant impact Criminal barrister Russell Fairbrother QC says the requirement for a judge to consider a s 27 report has been part of New Zealand’s sentencing laws since 2002. “The judge must receive such a report if one has been prepared. The only exception is if some ‘special reason’ makes hearing the report ‘unnecessary or inappropriate’. “It can cover five aspects of the offender – personal, family, whanau, community and cultural background – and it can provide evidence to the Continued on page 6
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LawNews Issue 10 | 16 Apr 2021
PROPERTY LAW
Key definitions missing in housing package By Diana Clement
Property and tax lawyers’ telephones rang hot on the day after the government announced its controversial housing policy package late last month. The removal of mortgage interest tax deductibility on investment properties has shocked investors and speculators alike. And alongside the shock, there is confusion and uncertainty about critical details which are still missing from the government’s package.
Nick Kearney
Exactly whom will be caught by the new interest deductibility rules? How will the family home exemption from the new, extended bright-line test work? The fine print which will, in many cases, determine whether investors and home owners are caught by the new rules remains frustratingly unclear.
Joanna Pidgeon
Terry Baucher
meaning landlords could still deduct mortgage interest. But this depends on how ‘new build’ is defined.
All this uncertainty makes it difficult to advise clients, says property lawyer Nick Kearney of Schnauer & Co.
These details, we are told, will be ironed out after some form of consultation. Again, it is not clear who will take part in this consultation and how long it might take.
What is an ‘own home’? Owner-occupiers are said to be excluded from the bright-line test. Or are they?
Specifically, property owners are wondering how the government will define ‘own/family homes’ and ‘new builds’ when deciding who will be caught by the 10-year bright-line test and who can still claim full deductibility on mortgage interest. Family homes are exempt from the bright-line test and those buying new builds as rentals after 27 March can continue to deduct mortgage interest.
If an own-home bought after 27 March switches to, or from, being the owner’s main residence and is rented for periods of more than 12 months at a time, the owner will pay income tax on the proportion of the profit made, less standard deductions. In the past, homeowners were caught by the bright-line test only if they rented out the home for periods totalling 50% or more of the time it was owned.
The definitions, once finalised, will have huge consequences for investors and some owner-occupiers. The key changes for investors are: The bright-line test (a tax on capital gains) is extended from five years to 10 for second-hand property, but remains at five years for new builds. Gains on own homes that switch back or forth to rental accommodation might also fall into the bright-line test regime.
Mortgage interest will no longer be tax deductible on rental properties bought after March 27 and will be phased out over four years for existing rentals. It is not yet clear whether new builds will be exempt from this rule,
Former ADLS President Joanna Pidgeon, of Pidgeon Judd, says the new rules will make completing withholding tax statements more complex and the form will most likely need redrafting. Some owner-occupiers let parts of their homes such as sleepouts to tenants, boarders, or short-stay guests. Or there may have both commercial and residential elements to a property. If a property has a mix of commercial and residential uses, the IRD looks at the predominant use. Business news website interest.co.nz reports that the government is still to decide whether interest can be deducted for residential properties which are also used as workplaces. An alternative to the predominant-use concept could be a formula for Continued on page 11
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LawNews Issue 10 | 16 Apr 2021
COMPETITION LAW
Artificial restrictions on output are now criminal By Gary Hughes
‘arrangements as to level of output between joint owners of production facilities’ may have legitimate gas-balancing rationale other than intent to influence price – and so was not price-fixing conduct.
Last week, on 8 April 2021, the cartel criminalisation changes took effect. From that date, competitors who enter into an arrangement with a cartel provision in it face potential criminal consequences.
Another illustrative case saw the commission issue a public warning to Consolidated Alloys, a metalroofing manufacturer. It had been in a commercial IP dispute with a local competitor, arguing its patent for soft-edge roofing flashing products had been infringed.
Even continuing to ‘give effect to’ a pre-existing arrangement can have the same unpleasant outcome. That means rivals who collaborate, including through a trade body, or tend to supply each other may need to assess with advisors whether aspects of their business dealings stray into cartel definitions. And, if so, whether they sit safely and squarely within the terms of an available exemption. To date, we have looked at price fixing and market allocation as key forms of cartel conduct. This week’s focus is output restriction. Restricting output Output restrictions occur when suppliers agree to prevent, restrict or limit their supply or production into a market where they are, or otherwise would be, competing. Section 30A(3) of the Commerce Act has since 2017 defined cartel provisions to include restricting output in:
the production or likely production by any party to a contract, arrangement or understanding of goods, which two or more of them supply or acquire in competition with each other;
the capacity or likely capacity of any party to a contract, arrangement or understanding to supply services if in competition with each other, as above;
supply or likely supply of goods or services, if in competition; and
acquisition or likely acquisition of goods or services, again in competition.
Nuts and bolts Attempts to cut production arise in industries subject to over-supply or excess capacity issues. When facing a glut in the market that won’t soon correct itself, firms may feel compelled to manage site closures or reductions in capacity, or effect structural changes in the supply chain. Notably, output restriction can also occur on the buying side – where two buyers or bidders agree to limit acquisition of an item they ordinarily compete to acquire. Key inputs and raw materials can be artificially limited to create bottlenecks that benefit sales or harm a third party. Exclusionary conduct, where some providers attempting to gang up in a targeted way against
Gary Hughes
Part of the settlement of that dispute included clauses trying to restrict products being made available by the competitor in the whole soft-edge flashing products category.
a third competitor (who may be causing the oversupply), can sometimes fall foul of these provisions. That can include understandings reached via trade associations or intermediaries such as advisors and industry brokers or agencies.
Requiring the competitor to agree not to sell those was seen as cartel-like behaviour and likely to substantially lessen competition. The commission chair said: “We believe the clause would have restricted competition after the patent expired, ultimately impacting on customers’ choice. Clauses like this protect established products by limiting innovation and the development of more efficient or better-value products that benefit consumers.”
The Commerce Commission has previously argued that price fixing implicitly included both market allocation and output restriction, at least indirectly, having an impact or impairment on market forces setting a price. However, the specific wording of the old pricefixing law led the Court of Appeal to disagree, when it came to output restriction (in Todd Pohokura – see below). The court doubted that arrangements to fix output should be treated as price fixing unless carefully crafted, knowing that lower output would closely affect price, and seeking to avoid the literal wording of s 30. Such arrangements should be tested under s 27 instead, where illegality will depend on a purpose, effect or likely effect of substantially lowering competition. Therefore, having output restriction expressly as part of cartel conduct is a new substantive change. Far more types of commercial contract clauses may be caught, unless being saved by an exemption.
Australian example The ACCC took action against poultry companies, an egg producer trade association and several individuals based in part upon an egg oversupply crisis meeting held in 2012. This allegedly attempted to reach a coordinated solution to reducing egg production, in response to perceived over-supply. After a costly few rounds of litigation, the prosecution failed on the basis there was not a sufficient degree of reciprocal obligation/ expectation reached amongst competing producers. Key commercial risks Industries that are dominated by interventionist trade bodies, or key supply facilities, and production alliances might be obvious areas of interest. But conceivably a lot of commercial restraint-of-trade clauses, or carefully-managed national distributor systems, might have clauses touching on volume and type of supplies to market.
Remember also the extended definition including the phrase ‘providing for’ a restriction, which deliberately widens the ambit of what is caught. Indirect methods or mechanisms not overtly or directly restricting supply, may still have an effect on production or likely production, supply or acquisition, or market capacity. Breach might arise if a provision creates a basis or system which causes/allows such outcome.
Note also extended s 30B situations where it may be another group entity (‘interconnected bodies corporate’) that end up in competition with each other.
Kiwi cases The Todd Pohokura case in 2015 concerned New Zealand’s largest natural gas field and a dysfunctional joint venture where the owners were by that stage at loggerheads.
Gary Hughes, barrister at Akarana Chambers, specialises in regulatory investigations and proceedings, especially Commerce Commission, FMA, SFO, Police FIU and AML/CFT Supervisor cases.
In litigation over off-take rules for gas, it was argued
Next week: bid-rigging
Close analysis will then be needed to demonstrate how the exemption for collaborative activity, including some types of restraints, or on the procurement side for joint buying or promotion agreements, applies.
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Continued from pages 1, 2 judge on rehabilitation initiatives and specifically ‘processes’ to resolve offence issues with the victim.” Fairbrother says over the years he has made good use of the reports and believes they often achieve more than a discounted sentence. “These reports are important for the offender as well. Often, nobody has asked them to look at their background or link their background experiences with their offending. The reports I’ve seen and shown to my clients have always had a significant impact on the offender and some really bad people, I’ve got to say, who have been quite moved by the contents of the reports.” Well-placed legal insiders who spoke to LawNews on condition of anonymity say the quality of cultural reports is a mixed bag with some being reasonably objective and others nowhere near hitting the mark. “Some are very useful but there are others which are just plainly advocacy and where you see exactly the same thing written in each report,” said one “The words and phraseology are the same and it’s quite plain they are cut-and-paste jobs.” Another insider says a number of judges remain cynical about the reports. “There are plenty of examples where judges have said ‘well, I’ve read the cultural report and while it’s all very interesting about the deprivation of your background, there’s nothing that persuades me to give you any discount’.” Yet another told LawNews the plethora of reports is jamming up the court system. “One of the real issues we’re confronting is that quite a lot of sentencings around the country are having to be adjourned because reports aren’t ready on time. Very few judges are prepared to proceed with sentencing without one so they’re causing a bit of a logjam in the system.” Root causes Justice Minister Kris Faafoi says it has long been acknowledged that better understanding of a person’s background and the issues in their life can help address the root causes of their offending and help put them on a path to successful rehabilitation. “Supporters of a Te Ao Māori – Māori world view – approach in our justice system, which aims to make courts more accessible and easier to understand, believe cultural reports are essential and can provide additional insights which judges may not always be aware of. “It could be argued that the significant increase in use of cultural reports under s 27 in the past couple of years may demonstrate their usefulness in understanding the root causes of a person’s offending and help find ways to address those underlying causes and prevent reoffending, which can contribute to better outcomes for victims.” Faafoi says he doesn’t accept the argument that money spent on cultural reports would be better directed towards rehabilitation. 6
Russell Fairbrother QC
Justice Minister Kris Faafoi
Section 27 reports are predominantly focused on looking at the disadvantages that may have contributed to the person’s offending behaviour and options to address it
given a 35% sentence discount for factors raised in his cultural report. In total he received a 60% sentence discount for these and his early guilty plea. Factoring in time served on remand and on bail, defendant A was sentenced to four months’ home detention. Special conditions included an AOD [alcohol and other drugs] assessment, counselling and tikanga Māori training. The judge cited our report throughout his summary and sentencing.
Defendant B appeared for sentencing for possession of firearms, possession of LSD for supply, cultivating cannabis and assault with intent to injure. Defendant B was given a 30% sentence discount on account of factors raised in the report, including neglect, abuse in care and disconnection from whakapapa and tikanga Māori. Defendant B was sentenced to three years’ imprisonment.
Defendant C appeared for sentencing for robbery and was given a 20% sentence discount on account of factors raised in the report, including an unsettled childhood, death of parent, drug abuse and disconnection from whakapapa and tikanga Māori. Defendant C was released with time served of nine months and issued a first strike warning.
Defendant D appeared for sentencing for threatening to kill a police officer and assaulting a police officer with a blunt instrument. As a result of factors raised in our report, including miscarriage of justice in his arrest due to his poor physical and mental health, defendant D was released with time served of seven months.
Defendant E appeared for sentencing for manslaughter. As a result of factors raised in our report, defendant E was sentenced to four years’ imprisonment. The sentencing judge complimented [us] for the helpfulness of our report. We were also able to negotiate for the defendant to serve her term in a youth justice facility until she was 18. The defendant has been released on parole after serving two years of her sentence.
“I don’t think it should be an either/or debate. In fact, it can be argued that cultural reporting is a legitimate and necessary part of rehabilitation. Where cultural reporting can be part of fundamental, positive solutions, it can be seen as a valuable contribution to the overall spending within the Justice Vote. “But, as Minister of Justice, I am aware that all spending within the justice system has to be both effective and sustainable. To that end, I am interested in investigating if the cultural reporting system, as it stands, is delivering as effectively as it can, where improvements might be made and how best practice can be more broadly applied. “Ministry of Justice officials will update me on progress in these and other areas of the cultural reporting regime.” Whatever the merits or otherwise of cultural reports, there is little doubt they achieve excellent outcomes for some defendants, with many receiving significant discounts when sentenced. Such examples are prominently displayed on the websites of the many cultural report writers touting for business:
Defendant A appeared for sentencing for charges including supply of methamphetamine, possession of cannabis for sale and receiving and misuse of a document. Defendant A was
LawNews Issue 10 | 16 Apr 2021
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CPD 7 hrs
Current Contractual Issues: Pre-contractual Misrepresentation This next seminar in the series will address the framework for analysing pre-contractual misrepresentation; what constitutes misrepresentation; the primacy of the written agreement and the judicial mindset; s 50 of the Contract and Commercial Law Act and “no representations” clauses; the significance of legal advice; and relief.
Mon, 3 May Christchurch 8.50am – 5.10pm
Wed, 5 May Auckland 8.50am – 5.10pm
Chair Bill Patterson, Partner, Patterson Hopkins
Livestream CPD 1.5 hrs
Tue, 4 May 4pm – 5.30pm
Learning outcomes:
Presenters
• • • • • •
Stephen Hunter QC, Shortland Chambers Mike French, Director Law Undergraduate Programmes, Auckland University of Technology
Get to grips with the framework for analysing pre-contractual misrepresentation – the relationship between the law of contract and the law of negligent misstatement. Receive a refresher on what constitutes mispresentation. Delve into the primacy of the written agreement and the judicial mindset, including looking at recent caselaw. Gain a better understanding of s 50 of the Contract and Commercial Law Act 2017 and “no representations” clauses. With reference to the Bushline case, examine the significance of legal advice. In respect of relief, revisit the approach under s 35 of the Contract and Commercial Law Act in light of the Court of Appeal’s decision in Southern Response v Dodds.
Love Thy Neighbour? A guide to navigating common neighbour disputes In person | Live Stream Disputes between neighbours can escalate quickly and disproportionately. On occasion, tensions build until one neighbour explodes, like one who took a chainsaw to his neighbour’s fence. Often however, disputes make their way through our courts and tribunals, with some culminating in lengthy and costly litigation (such as in the case of Aitchison v Walmsley where a dispute over a play-fort led to 4 years of litigation). Knowing how to navigate and best resolve these often heated disputes may be beneficial to all lawyers advising clients in the area. This seminar provides a guide to navigating common neighbour disputes, in the context of recent and interesting case law, and will focus on covenants, cross-leases, rights of way, boundaries and actionable nuisances.
Learning outcomes: • Gain a better understanding of the law as it relates to restrictive covenants, cross-leases, rights of way, boundaries and actionable nuisances, and become aware of recent and key case law. • Learn what steps to take, and what remedies are available, where disputes can only be resolved by litigation. • Learn about practical solutions to consider before disputes become litigious, as well as the alternative dispute resolution mechanisms available, and organisations that can assist your clients manage their problems.
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Tue, 11 May 4pm – 6.15pm
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Chair Geoff Hardy, Partner, Martelli McKegg
Workshop CPD 4 hrs
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LawNews Issue 10 | 16 Apr 2021
CPD in Brief Conducting Effective Client Interviews
Workshop
The start of virtually every lawyer-client relationship is the initial interview. It is an opportunity to identify who the client is, understand the nature of the services required, clearly establish terms of the relationship, manage client expectations, and make a sound impression. Mistakes made during the initial interview can, therefore, have a lasting impact on the relationship and even hinder a lawyer’s ability to provide effective representation. Through a combination of coaching and learn-by-doing methods, this workshop will develop the skills required for conducting effective client interviews. Attendees will learn how to structure and guide the interview process to improve efficiency, enhance rapport and minimise common mistakes. Presenters/Facilitators: Dr Stephanie Mead, Barrister Sole, and Instructor, Institute of Professional Legal Studies; Seung Youn, Lawyer - Public Defence Service
CPD 3 hrs
The Taxation of Settlements and Awards: What Lawyers Need to Know
Seminar
In person | Live Stream Advocating for clients to achieve the best financial outcome is critical. Whether they receive a court award or settle out of court, in disputes involving money your client will ultimately be concerned with their bottom line. But what happens if they receive an unexpected tax bill and don’t pocket what they were expecting? Alternatively if your client is on the other side of the dispute and paying out, will a tax deduction be available to relieve some of the burden? The objective of this seminar is to familiarise you with key income tax and GST considerations you should keep in mind when negotiating settlements or pleading claims. While your client may not expect you to be a tax expert, you should understand the basic questions to ask, when to ask them, the potential ramifications to you and your client if tax considerations are overlooked, and when to recommend that your client seek specialist tax advice. Presenters: Katerina Wendt, Barrister, Richmond Chambers; Robert Grignon, Senior Legal Advisor, Chapman Tripp
Debts, Disputes and Retentions: Recent Construction Case Law Deconstructed In person | Live Stream A recent spate of cases has brought into sharp focus a number of issues and key principles of interest and importance to all practitioners advising clients in the building and construction industry. Some of these issues include, inter alia, the validity of payment claims and payment schedules; the scope of an adjudicator’s powers in determining a dispute; letters of intent and the importance of contract formation; and issues surrounding the retentions regime. This seminar will provide a summary of industry noteworthy cases and key takeaways, and unpack the issues surrounding the retentions regime in the context of recent case law and Government announced changes to the Construction Contracts Act 2002. Presenters: Geoff Hardy, Partner, Martelli McKegg; Shanti Frater, Partner, Simpson Grierson
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Sat, 15 May 9am – 12.15pm
Livestream CPD 1.5 hrs
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Seminar Livestream CPD 2 hrs
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ESTATES, PROPERTY AND SUCCESSION
Law Commission reveals succession law proposals Te Aka Matua o Te Ture/Law Commission is seeking feedback on its recently-published issues paper, Review of Succession Law: Rights to a person’s property on death | He arotake i te āheinga ki ngā rawa a te tangata ka mate ana. In the paper, the commission identifies problems with the law governing claims against a deceased person’s estate and presents options for reform. The paper focuses on the Property (Relationships) Act 1976 (the PRA), the Family Protection Act 1955 (the FPA), the Law Reform (Testamentary Promises) Act 1949 (the TPA) and the entitlements on intestacy under the Administration Act 1969.
to the commission’s te ao Māori framework for considering succession. The commission’s other proposals include:
a different approach to the property available to a surviving partner who elects a division of the couple’s relationship property;
the repeal of the FPA and the introduction of more principled ‘family provision awards’, with limited options for adult children to claim property from a deceased parent’s estate;
The commission’s review of succession law follows the completion of its review of the PRA in mid-2019. In that review, it recommended that Part 8 of the PRA, which deals with entitlements of a surviving partner, should be looked at together with the wider law relating to claims against an estate and this project was then added to the commission’s work program.
the introduction of a single statutory cause of action to replace the TPA and other restitutionary claims in respect of contributions to the deceased or their estate;
changes to those entitled to succeed in an intestacy and the size of their respective shares of the estate;
The law in this area is several decades old. Many of the key statutes under review were drafted in the mid-20th century. Family arrangements and public attitudes and values are very different in contemporary Aotearoa New Zealand. The commission reviewed part of this law in the 1990s but only some of its recommendations were implemented.
options to ensure succession of taonga occurs according to tikanga Māori rather than general succession law;
Another focus of the review is how best to enable the exercise of tino rangatiratanga and tikanga by Māori over succession matters, although reform of succession to whenua Māori under Te Ture Whenua Māori Act 1993 is outside the terms of reference for this review.
To help identify issues with the present law, in April 2020 the commission issued a practitioner survey to engage the profession. In June 2020, it held a wānanga with tikanga experts on what succession means for Māori and how the law might be reformed to enable Māori to resolve succession matters in a way they wish. The commission has also worked with the University of Otago, which with support from the Michael and Suzanne Borrin Foundation undertook a nationwide survey of a representative sample of the population to understand public attitudes towards property on death. In the paper, the commission proposes that the law be modernised and brought together in one statutory regime to govern claims against estates. The content of such a statutory regime will be influenced by Māori responses
considering how tikanga Māori may be woven into state law;
possible anti-avoidance provisions to recover property that falls outside an estate in certain circumstances;
other reforms concerning contracting out and settlement agreements, the resolution of disputes, court jurisdiction, cross-border issues and other reform issues.
The commission is calling for submissions on the issues paper to help inform the final report which it will present to the government before the end of the year. Consultation closes on 10 June 2021. The issues paper is available on the commission’s website, where a link to its public consultation website can also be found: Review of Succession Law | Law Commission Helen McQueen, the Deputy President, together with Professor Emerita, Nicola Peart will present the keynote address at the Cradle to GraveTM Conference
ADLS members and non-member lawyers who have registered their Airpoints™ details with ADLS can earn Airpoints Dollars™ on all eligible purchases. Learn more
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LawNews Issue 10 | 16 Apr 2021 Continued from page 3 apportioning deductibility based on the floor area or rental income generated by each type of usage, or it could just exempt them altogether. Purely commercial property is excluded from the new policy rules. What are new builds? To encourage development, new builds escape the 10-year bright-line test (though the previous five-year rule will still apply). New builds might also escape the interest deductibility rules when owned by investors, but that is yet to be determined, says Pidgeon. The big ‘if’ is the actual definition of a new build, which will be worked out in consultation with the tax and property communities over the coming months, but it is intended to include properties that are acquired within a year of receiving their code compliance certificate under the Building Act 2004. But how might the new rules apply to investors who bought a house off-theplans and had an unconditional agreement two weeks before 27 March, when the government’s new changes took effect? Will this yet-to-be-built house be classified as an existing property for the purposes of interest deductibility because the purchasers had a binding sale and purchase agreement in place before 27 March? Or will it be classified as a ‘new build’ and, thus, subject to the five-year bright-line test rather than the new 10-year rule? Tax consultant Terry Baucher says it’s likely the government will be hit with an avalanche of submissions in its consultation process, and he expects it will be generous in its definition because it wants to encourage new builds. Interest deductibility Shockwaves reverberated around investment and professional communities at the new rules, especially the removal of interest deductions for residential property. They came out of the blue and were not signalled in advance, says Baucher. Under the previous rules, residential investors could deduct the interest on loans in calculating their taxable income and this reduced their tax bill. The government called it a loophole, but investors argue they are no different from any other business that can claim its costs. Baucher says it was an anomaly because investors used loans to derive capital gain but were taxed only on the rental income portion of their total return. Whatever the government decides, it could have trouble collecting its dues on the bright-line test. Writing in Interest.co.nz, Jenee Tishreen said compliance with the previous five-year bright-line test could have been below 50%. More rules Other rules in the Income Tax Act 2007 that can tax gains on the sale of land (including residential land) continue, regardless of when the property was purchased. That includes the associated persons rules for speculators, land developers and dealers. Rules still apply for property bought with the intention of making a capital gain. In that case, capital gains are taxable at any stage. The bright-line tests potentially apply only if none of the other land sale rules apply. Next week: the unintended consequences
Offices Available Following some barristers leaving as a result of Covid, we have four offices available for rent, of varying sizes. The Chambers share a refurbished floor (with separate areas) with Hussey & Co., a boutique forensic and general accounting firm. There are shared meeting rooms (a formal boardroom and a less formal meeting room), and communal entrance and client waiting area. Telephones, internet connection, printing and secretarial services also available and some furniture available.
Senior property / general role & Intermediate private client role Top-performing law firm seeks two new team members: (1) senior property / general lawyer with partnership aspirations; and (2) intermediate private client lawyer • Senior property / general lawyer (6+ years’ PQE) – partnership opportunity in two years •
Intermediate private client lawyer (3+ years’ PQE)
My client is a top-performing law firm seeking a senior property / general lawyer with partnership aspirations over the next two years. This is a new role to help manage the firm’s growth and partnership succession. One of the partners is planning to retire over time, so a rare opportunity exists for an ambitious and capable lawyer to join the firm as a senior associate and work towards partnership. You do not need to bring a client base, as this well-established firm has a substantial client base which requires the right person to help manage it. This role has a property focus but requires general practice experience. The work is interesting and varied, including commercial and residential property transactions of all types, construction contracts, wills & trusts, estate administration, relationship property and commercial work of all types. You do not need to be an expert in all areas, but your experience and expertise will be primarily in property law, with good private client experience. A role also exists for an intermediate private client lawyer. This role includes wills & trusts, powers of attorney, relationship property and assisting other staff from time to time on other matters, such as residential conveyancing. You do not need to have experience in all areas, as training and support is available. COVID has taught many lawyers what my client already knows well – you do not need to work in a city office to do quality work for great clients and have a successful career. My client is a suburban Auckland firm with an outstanding client base and a loyal and capable team of partners, lawyers, legal executives, and support staff. If you are interested in either role, please email me your CV and any initial questions you may have to sam.bassett@markhams.co.nz
Cost depends on office size and ranges from $150 – $300 per week plus gst. No long-term commitment required. Photographs of the Chambers can be viewed at www.hco.co.nz/gallery. Contact: Shane Hussey for further details, Shane@hco.co.nz 09 300 5481
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OBITUARY
Former ADLS President dies Former ADLS President Bryan Mahon died on Good Friday at the age of 97. Regarded as a pioneer in the legal profession, Mahon served as ADLS President from 1974 to 1975. His numerous contributions to the law included the development of the cross-lease, which enabled clients to avoid the cost and strictures of subdivision. This was ‘innovative and important’, says his friend and colleague, Bill Spring. “The subdivision of land was difficult and costly, so Bryan helped to design a process with cross-leases that was accepted by the Land Titles Office. This system became very popular due to its efficacy and relative cheap and easy implementation and the ability to register bank mortgages.” Mahon was also the first lawyer to set up a practice on the North Shore, at a time when law firms were largely confined to the Auckland CBD and suburban practices were rare. “I was very fond of Bryan who was my mentor when I set up as a sole practitioner at Takapuna in 1986,” Spring says. “I ran a series of luncheons for North Shore lawyers over a period of 25 years. In 1997, Bryan spoke at one of these luncheons at Takapuna and almost 90 lawyers attended, attesting to the wide admiration and respect for him as a leader of the profession.” Spring says Mahon also spoke of his first day at as a law clerk when his primary job was to light the fires in each of the partners’ offices. As a very young soldier, Mahon served in WW2 in the 21st NZ Infantry Battalion.
WILL INQUIRIES LawNews The no-hassle way to source missing wills for $80.50 (GST Included) Email to: reception@adls.org.nz Post to: ADLS PO Box 58, Shortland Street, DX CP24001, Auckland 1140 Fax to: (09) 309 3726 For enquiries phone: (09) 303 5270
Wills Please refer to deeds clerk. Please check your records and advise ADLS if you hold a will or testamentary disposition for any of the following people. If you do not reply within three weeks it will be assumed you do not hold or have never held such a document. Derek Charles COLLINS, late of 1043D State Highway 25, Whenuakite, Whitianga, married, retired, aged 85 (died 22’06’20) Peter Preshaw HOLLIDAY, Late of Whitianga Continuing Care, Halligan Road, Whitianga, single, retired, aged 90 (died 28’02’21) Fetuleia’i UALESI (aka Fetu or Gago), Late of Otara, Auckland, retired (former manager at the freezing works), aged 85 (died 10’09’19)
“Bryan gave to his family, his community, his profession and his country and was always a perfect gentleman,” Spring says.
Bookstore A convenient, one-stop-shop for all your legal resources ADLS members, including student members, receive a 10% discount
Visit the online bookstore:
adls.org.nz/bookstore Phone:
09 303 5270 Email:
thestore@adls.org.nz
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The ADLS Bookstore couriers nationwide Or, browse in person at: The ADLS Bookstore Ground Floor Chancery Chambers 2 Chancery Street Auckland CBD
LawNews Issue 10 | 16 Apr 2021
Chancery Chambers offices for rent
E tū SOLICITOR Auckland Full-Time E tū is New Zealand’s largest private-sector union. We represent, organise and campaign across Aotearoa New Zealand to empower working people and our communities for a better life. We are committed to Te Tiriti o Waitangi. This rewarding role involves contributing to the strength of E tū by providing legal and industrial support to E tū staff and members. We currently have a full-time vacancy for an E tū Solicitor based in Auckland. This role requires a person who is a qualified lawyer with energy and commitment to social justice principles and the union movement. Depending on applicants, the role will be appointed at a junior or intermediate level, and is covered by an E tū Employees Collective Agreement.
Two offices are available in the heritage Chancery Chambers building on the corner of Chancery and O’Connell Streets.
The person appointed will work in a small internal legal team, in liaison with external legal counsel, providing legal services including advice, analysis and representation to advance the strategies of the union.
There is a 33.71sqm office on the third floor of the O’Connell Street side of building and a 15.75sqm office on the fifth floor of the Chancery Street side of building.
Applicants must be self-motivated and able to work independently within a dynamic team. A current full NZ driver’s licence, computer literacy and excellent verbal and written communication skills are required.
Opex includes reception to greet clients/receive couriers, kitchen facilities, copy room access and use of shared meeting rooms.
For further information about E tū please visit our website www.etu.nz. For a job description, please contact: lorraine.cunningham@etu.nz
Please contact Krystal Marshall on (09) 303 5277 or krystal.marshall@adls.org.nz for more information
To apply, please send your CV along with a covering letter by 5.00pm, Friday 30 April to: Lorraine Cunningham lorraine.cunningham@etu.nz.
TM
Cradle to Grave Conference 2021 7 CPD hours
The interface between trust, property and family law Christchurch 3 May
Auckland 5 May Proudly sponsored by
Prices:
Members $500 + GST | Non-members $610 + GST Early Bird offer available for bookings made by 17 April 2021.
T 09 303 5278
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W adls.org.nz/cpd
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