Law Matters

Monthly legal newsletter that aims to provide our key clients with updates on legal matters and issues relevant to them.

SEPTEMBER 2012

PROPOSED TAX CHANGES TO LEASE INDUCEMENTS - Aligning Tax Treatment or "Channelling Muldoon"? The current asymmetric tax treatment of lease inducement payments in being generally tax deductible for the landlord and non-taxable receipt for the tenant is systematic in a commercial context and poses a risk to the revenue base. 

SECURITIES ACT CHANGES - Property Investment and Development The Securities Act 1978 has been hitting the headlines recently.  The Supreme Court has handed down a judgement in case brought by Blue Chip investors that has surprised many commentators and property syndicators are about to face greater compliance requirements with the expiry of the Real Property Proportionate Ownership exemption.   [request]

JULY 2012

RESIDENTIAL CARE SUBSIDIES AND THE PITFALLS OF GIFTING The abolition of gift duty at the end of last year was greeted with considerable enthusiasm.  However, in an earlier edition of Law Matters we, along with many professional advisers, sounded a word of caution for people wanting to complete their gifting programme in one fell swoop.  A recent example highlighted some of the issues that may need to be considered...

WHO IS RESPONSIBLE WHEN BAD OR INCORRECT INFORMATION IS PROVIDED BY OR ON BEHALF OF A VENDOR TO A PURCHASER This was the issue that the Supreme Court had to deal with in Marlborough District Council v. Altimarloch Joint Venture Limited...

WARRANTIES AND STRICT LIABILITY A SALUTARY WARNING A recent High Court decision highlighted the need to pay close attention to any warranties you may give under a contract.  The particular issue before the Court related to warranties made by a vendor under an agreement for sale and purchase of land - that the orchard being sold comprised a certain area of kiwifruit and lemon trees.  The area of trees warranted proved significantly wrong...  [request]

MARCH 2012

END OF AN ERA After 30 years with Knight Coldicutt, Kerry Knight has decided to step back from the firm and concentrate on his other business enterprises.  Although his departure has been anticipated for several years, it doesn't change the fact that this is the end of an era for the firm.  Kerry's contribution to Knight Coldicutt has been immense...

THE OIO AND THE CRAFAR FARMS - THE CONTINUING SAGA Knight Coldicutt Limited previously acted for the Hong Kong listed Natural Dairy (NZ) Holdings Limited, which wanted to establish a dairy farm, production and export business in New Zealand - based initially on the acquisition of the Crafar Farms.  Amid huge media and public interest and debate, Natural Dairy's application to acquire the Crafar Farms was rejected...

CAVEATS - I'LL PAY YOU BACK FROM THE MONEY FROM THE SALE OF MY HOUSE Even if a debtor promises to pay you back from the sale of a property, this alone does not give you security over that property - you remain the unsecured creditor!... [request]

DECEMBER 2011

UNIT TITLES ACT 2010 - A BODY CORPORATE MUST DO!  This month we bring you another must do in relation to the Unit Titles Act 2010 (the Act). No doubt this has already been taken care of, but we remind you that all bodies corporate must have their first AGM following the enactment of the Act by 20 December 2011....

LIABILITY UNDER THE BUILDING ACT - THE GIFT THAT (POTENTIALLY) KEEPS ON GIVING AND GIVING  Limitation Act  Generally (there are always eceptions!) the Limitation Act 2010 imposes a six year limitation period on claims. One exception is where the defect is latent and is not discovered until after the six year period has expired....

EMPLOYMENT LAW - Take Employment Penalties Seriously  Earlier this year, the maximum penalties under the Employment Relations Act (ERA) doubled. Employers should expect that penalties imposed by the Court or Authority will increase significantly. Also, it seems that the ERA will take a more proactive approach in recovering penalties.... [request]

NOVEMBER 2011

GIFT DUTY ABOLITION: WHAT'S CHANGED? Legislation to abolish gift duty has been passed. But has anything really changed?  The practical effect means that any amount can be gifted in one lump sum to reduce trust debt without attracting gift duty. But, there are still a number of issues that need to be considered when gifting....

BODY CORPORATE: MAINTENANCE OBLIGATIONS  "Hi Taff, this is a crazy situation. Can we not get away from the Unit Titles Act?" So started a recent email from a retired lawyer, exasperated over the maintenance provisions in the Unit Titles Act 1972. The problem concerns a friend who lives in the last unit of a row of three. A storm water system runs underground...

UNSOLICITED ELECTRONIC MESSAGES ACT 2007: FACSIMILES  From 20 October 2011 facsimiles have been removed from the list of exempt electronic messages and are now caught by the Act.... [request]

OCTOBER 2011

IS EVERYTHING WE DO NOW TAX AVOIDANCE? The recent decision in Penny and Hooper v Commissioner of Inland Revenue has put the spotlight on company and trust structures being used for what the Inland Revenue Department might describe as tax avoidance structures....

EARTHQUAKE COVER: LESSONS FOR LANDLORDS & TENANTS  As a result of the Canterbury earthquakes many tenants have been left in an unenviable position. Buildings which they previously occupied were and are structurally undamaged. However, access to these buildings was and remains prohibited...

KIDS JAM FOR KIWI CAN  Knight Coldicutt is a proud supporter of The Auckland Kiwi Can Trust. http://www.kiwican.org.nz click here to view more... We had the privilege of attending the recent annual Kiwi Can Jam.  From hula hoop to hip hop to haka - crowds from across South Auckland were treated to a dance spectacular...

RMA: "IT'S NOT OUR FAULT - OUR HANDS ARE TIED!" So said our political masters.  On 15 September 2011 the New Zealand Property Group (NZPG) hosted a Resource Management Act political debate. The National Party was represented by Nicky Wagner and David Parker represented Labour. Also in the audience were Kath McCabe, ACT Party, and David Hay, Greens. The discussion centred on excessive regulation by councils... [request]

SEPTEMBER 2011

WHO OWNS THE VERANDAH? BC 95035 v CHANG Body Corporate 95035 applied for a declaration as to the ownership of the verandah affixed to a 7-storey building at 2 Queen Street, Auckland. The verandah is in poor repair with an estimated repair bill of $500,000.  In 1982 the building was subdivided into unit titles and the body corporate was established. Fast forward to 2010... 16 years after the redevelopment of the building...

UNIT TITLES - PRE-CONTRACT AND PRE-SETTLEMENT DISCLOSURE  Following articles in recent issues of Law Matters regarding the changes introduced by the Unit Titles Act 2010 (UTA), we now bring you more details in relation to the compulsory Pre-contract and Pre-settlement Disclosure Statements.
[request]

JULY 2011

GST - COMPULSORY ZERO RATING  In earlier editions of Law Matters we foreshadowed the 1 April introduction of new GST rules providing for the Compulsory Zero Rating (CZR) of 'business to business' land transactions. There are several key points to bear in mind when entering contracts for the sale of commercial property under these new rules....

THE UNIT TITLE ACT : PRE-CONTRACTUAL DISCLOSURE Unit Title owners take note - if you are thinking of selling your unit, the documentation just got a little harder! New changes introduced on 20 June 2011 mean that a pre-contractual disclosure statement must be attached to every Agreement for Sale and Purchase for the sale of a Unit Title property....

THE UNIT TITLE ACT : LAYERED DEVELOPMENTS  One of the aims of the new Unit Titles Act 2010 is to repeal and replace the outdated 1972 Act in order to cater sufficiently for multi unit developments, particularly in the Auckland region.  A new concept introduced by the Act relevant to property developers is the introduction of layered developments....

CONDITIONS - THE OBJECTIVE AND SUBJECTIVE TESTS  "It is the stars. The stars above us, govern our conditions." - William Shakespeare.  Back in the day the Bard may have been right, but today many sale and purchase agreements contain conditions that are governed by the satisfaction or discretion of one of the parties. How these clauses are drafted can have a huge impact on the extent of that discretion.... [request]

JUNE 2011

LEASE INCENTIVES - CAPITAL CONTRIBUTIONS AND TAXATION IMPLICATIONS FOR TENANTS  Landlords commonly entice proposed tenants into entering into a lease by using varying incentives. One incentive frequently used is a cash contribution by a landlord towards the completion of a fit out by a tenant....

HILTON QUEENSTOWN (Opinion Kerry Knight) I visited the Hilton in Queenstown just before it opened a couple of weeks ago. It is probably the most luxurious hotel in Australasia, sitting spectacularly on the edge of Lake Wakatipu.  During its planning and contruction I, like many others, was openly critical...

WE GUARANTEE OUR WORKMANSHIP  We often see the phrase "we guarantee our workmanship", but it's hard to understand what it actually means. A guarantor is usually a third party who stands in for the original contracting party if they don't perform.  However when a business or service states "we guarantee our workmanship" it effectively means...
  [request]

APRIL 2011

KNIGHT COLDICUTT LIMITED  After 52 years of being a partnership, we are very pleased to inform you that from 1 April 2011 Knight Coldicutt will become a limited liability company. This is happening for several reasons....

EXERCISE IN CLARIFICATION - GST AND COMMERCIAL DWELLINGS  From 1 April 2011 new rules will apply to the GST treatment of commercial dwellings. Currently, accommodation provided by GST registered entities is subject to GST unless it is supplied in a residential dwelling....

REMINDER - NEW RULES FOR GST ON THE SALE OF COMMERCIAL PROPERTY  In our November 2010 issue of Law Matters we talked about the anticipated introduction of compulsory zero-rating (CZR) of GST on the sale of commercial property. This policy has now been passed into law with new rules to apply from 1 April 2011....
[request]

FEBRUARY 2011

DEATH OF THE LAQC Things Just Aren't What They Used To Be  In keeping with the correct commercial advice of the time, many property investors created Loss Attributing Qualifying Companies (LAQCs) as the ownership vehicle for investment properties. This took advantage of the tax losses...

GIFT DUTY  An Archaic Tax To Be Abolished  The Government has announced that it is abolishing gift duty from October 2011. Gift duty was introduced in 1885 to protect estate duty by discouraging people from giving away their assets before they died, and also to raise revenue. Estate duty was abolished in 1992...

EMPLOYMENT RELATIONS Good Faith & Taking Notes  If you only remember two things about the Employment Relations Act 2000 (ERA), the first is the duty to act in good faith. The second is always to have a written agreement.  Acting in good faith is a statutory duty. Employers, employees and unions must deal with each other honestly... [request]

DECEMBER 2010

2011 - KEEP YOUR SEATBELTS FASTENED  It's that timeof year again when we predict what the next twelve months will bring. This time last year my prediction was that the recession would be long forgotten by now with SuperCity, Rugby World Cup, increased immigration and the housing shortage contributing to fuelling an economic comeback....

STILL WAITING FOR YOUR GST REFUND? HOW LONG CAN IT TAKE?  The Supreme Court in Contract Pacific Limited v Commissioner of Inland Revenue has effectively decided that a tax payer will, in certain circumstances, wait indefinitely for a GST refund....

LEASEHOLD - EVIL OR GOOD  In the good old days leasehold was commonplace in the eastern suburbs and other parts of Auckland City, but that was when our population and land values were fairly constant. As people didn't have to fund the land component, leasehold was a great way of entering the housing market....

WHEN ARE ESSENTIAL TERMS ESSENTIAL?  Contracts can be cancelled if a party has breached an essential term. However, for many years the problem has been ascertaining what amounts to an essential term. The Supreme Court's decision in a recent case...

DISPUTES AND GETTING THEM SORTED OUT  Disputes happen. When you get tangled up in a situation that seems to be deteriorating there are a number of different appraoches you can take. One of the most common key resons that things spiral out of control...
[request]

NOVEMBER 2010

NEW GST RULES FOR THE SALE OF COMMERCIAL PROPERTY  A bill currently before parliament will simplify the GST treatment of many property sales by zero rating practically all business to business sales of land. Currently before Parliament is the Taxation (GST and Remedial Matters Bill...

GIVING TO CHARITY  How often are you called at home in the evenings, or met by someone on the street who is fundraising and wants you to make a donation, or to buy something in the name of a charity? All the time! I usually ask these people whether they are being paid...

TRUSTS: IT'S A WAR OUT THERE AND THE WORLD OF AN INDEPENDENT TRUSTEE IS CHANGING  Trusts are widely used in New Zealand. They are administered by the Inland Revenue Department as if they are separate entities. The difficulty is that, with the economic downturn, trusts are under attack worldwide... [request]

OCTOBER 2010

ENDURING POWERS OF ATTORNEY

NOT QUITE SO EASY AFTER ALL
[request]

SEPTEMBER 2010

ASSOCIATED PERSONS - THAT WAS THEN; THIS IS NOW 

LOVE THY NEIGHBOUR 

SHAKEN NOT STIRRED 

THE GST INCREASE
[request]

AUGUST 2010

ARE WE SELLING OUT TO THE CHINESE? 

SUE OR SETTLE?
[request]

JULY 2010

UPDATE: UNIT TITLES ACT 2010

WHAT DO YOU DO IF YOU ARE OFFERED AN INCENTIVE THAT YOU CAN'T REFUSE?

OPINION: THE MEDIA BECOMES PUBLIC OPINION
[request]

JUNE 2010

OBLIGATIONS OF PROFESSIONAL TRUSTEES 

LAND INFORMATION MEMORANDUM (LIM REPORTS)

OPINION:  THE PROPERTY MARKET TAKES A CUP OF TEA
[request]

MAY 2010

FORTRESS FONTERRA:  THE FONTERRA CAPITAL STRUCTURE CHANGES

CREDITORS' COMPROMISES
[request]

APRIL 2010

A TRAVESTY OF JUSTICE

THE IMPORTANCE OF PAYING A MARKET SALARY

UPDATE:  UNIT TITLES BILL PASSES INTO LAW [request]

MARCH 2010

IRD v THE TRUST

MANAGEMENT RIGHTS AND ENCUMBRANCES [request]

FEBRUARY 2010

IT'S SIMPLE - GOOD SERVICE IS WHAT YOU WANT 

PROPOSED GST DOMESTIC REVERSE CHARGE - A GOOD IDEA?
[request]

DECEMBER 2009

SETTLEMENT NOTICE SERVICE 

CHANGES TO THE DISTRICT COURT PROCESS 

FIXED FEES - MORE BANG FOR YOUR BUCK
[request]

NOVEMBER 2009

INCOME TAX ACT - NEW ASSOCIATED PERSONS RULES

OPINION:  WHERE WILL NEW ZEALAND BE 12 MONTHS FROM NOW? [request]

OCTOBER 2009

'SAFE AS HOUSES'. YEAH RIGHT!

UNIT TITLES BILL - RECOMMENDED CHANGES

SIZE DOES MATTER
[request]

SEPTEMBER 2009

BANKS REQUIREMENTS FOR FUTURE FUNDING 

DISPUTES TRIBUNAL [request]

AUGUST 2009

STANDARD AGREEMENT FOR SALE AND PURCHASE: YOU HEARD IT HERE FIRST...
 
DEVELOPER'S LIABILITY FOR BUILDING DEFECTS CLARIFIED [request]

JULY 2009

MISSING THE POINT IN THE CONSTRUCTION CONTRACTS ACT 2002! [request]

JUNE 2009

GETTING IT RIGHT WHEN SELLING OFF THE PLANS

LEAKY BUILDING CLAIMS & ADJUDICATION [request]

MAY 2009

NEW UNIT TITLES BILL CREEPS A STEP FURTHER

TRAPS WHEN DEALING WITH MAORI LAND

THE RECESSION IS OVER - YEAH RIGHT! [request]

APRIL 2009

EXCHANGE YOUR PROPERTY

EMPLOYMENT LAW

PROPORTIONAL OWNERSHIP [request]

MARCH 2009

KC PROPERTY TRADE & EXCHANGE REGISTER - UNLOCKING VALUE AND REFRESHING DEBT

PROPORTIONAL OWNERSHIP [request]

FEBRUARY 2009

DIRECTORS BEWARE - AGREED VALUE OF YOUR SHARES MAY NOT BE WHAT YOU THINK! 

RESOURCE MANAGEMENT ACT - PHASE ONE OF THE REFORMS UNVEILED [request]

DECEMBER 2008

EMPLOYMENT LAW UPDATE - POLICY CHANGES

PURCHASERS BEWARE - LIMITED WARRANTIES
[request]

NOVEMBER 2008

BUILDING ACT UPDATE - INCREASED CONSUMER PROTECTION

LIMITED PARTNERSHIP

LAWYERS CAN SELL REAL ESTATE

WE SHOULD BE FEELING BETTER [request]

OCTOBER 2008

FAIR TRADING ACT - SECTION 9 REVISITED

HOW IS IT THAT I CAN BE SUED FOR PAYING TWO EMPLOYEES THE SAME SALARY?
[request]

SEPTEMBER 2008

BUYING A PROPERTY ON A 'PLUS GST' BASIS

FINANCE COMPANIES AND MORATORIUMS 
[request]

AUGUST 2008

BURYING YOUR HEAD IN THE SAND WILL EXPOSE YOUR BOTTOM LINE

RELYING ON THE ACCURACY OF LIM REPORTS

WHAT DO YOU DO IF YOUR EMPLOYEE WANTS TO WORK FROM HOME? [request]

JULY 2008

HEALTH CHECK - HAS YOUR BUSINESS HAD ONE LATELY?

TERMS OF TRADE
[request]

JUNE 2008

REPAYING A LOAN? GETTING CHARGED A FEE FOR EARLY REPAYMENT? IS IT ILLEGAL?

CREDIT CRUNCH [request]

MAY 2008

ACCESS LOTS PROPERTY LAW ACT 2007

PEEKING AT THE WORLD FROM OUR PERCH
[request]

APRIL 2008

BODY CORPORATE AND HOTELS OR SHOPPING CENTRES [request]

MARCH 2008

CHANGES TO LANDLORD’S RIGHTS WHEN TENANT IN DEFAULT OF OBLIGATION TO PAY RENT UNDER A LEASE


AMERICANS CALL IT SUB PRIME. IN NEW ZEALAND IT IS CRAPPY LENDING!
[request]

FEBRUARY 2008

PROPERTY LAW ACT 2007 NOW IN FORCE

VENDOR REPRESENTATIONS [request]

DECEMBER 2007

ELIGIBLE PERSONS EXEMPTION UNDER THE SECURITIES ACT 1978

CANCELLATION: A SALUTORY LESSON [request]

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