Newsletter
Winter 2009
In This Issue:
 Click here to download the printable PDF version.
Staff News
CHANGES AT TURNER HOPKINS
There have been a number of changes at Turner Hopkins over recent months. We therefore thought it would be appropriate to list all the members of our team and their role:
Mike Newdick - Partner (mike@turnerhopkins.co.nz) Our senior commercial partner with in excess of 25 years experience. Mike leads the commercial and conveyancing teams.
Michael Robinson - Litigation Partner (mrobinson@turnerhopkins.co.nz) Michael has almost 20 years litigation experience and leads the civil litigation, relationship/family and employment law teams
John Stirling - Estate Planning/Private Client Partner (john@turnerhopkins.co.nz) John has over 20 years experience and deals principally with estate planning, trusts and property related matters.
Andrew Hooker - Senior Associate - Civil Litigation (andrew.hooker@turnerhopkins.co.nz) Andrew is one of New Zealand's most experienced insurance law practitioners. He was a partner in a major city firm specialising in insurance litigation for almost 10 years and then in-house senior counsel at a leading national insurer.
Rachael Jhinku - Senior Commercial Solicitor (rachael@turnerhopkins.co.nz)
Assisting Mike Newdick and John Stirling
Douglas Mitchell - Senior Solicitor
Civil Litigation and Common Law (douglas@turnerhopkins.co.nz)
Jane Polson - Solicitor
Specialising in Family Law (jane@turnerhopkins.co.nz)
Lianne Jamieson - Legal Executive
Property, Finance and Security Law (lianne@turnerhopkins.co.nz)
Maree Jones - Legal Executive
Property, Finance and Security Law (maree@turnerhopkins.co.nz)
Raechel Pedrotti - Legal Executive
Conveyancing and Estates (raechel@turnerhopkins.co.nz)
Helen Wendelborn - Legal Executive
Employment Law (helen@turnerhopkins.co.nz)
Amy Christie - Legal Executive and PA to Mike Newdick (amy@turnerhopkins.co.nz)
Liz Dentith - PA to John Stirling (liz@turnerhopkins.co.nz)
Carol Ross - PA to Michael Robinson (carol@turnerhopkins.co.nz)
Sandy Webb - PA to Andrew Hooker (sandy@turnerhopkins.co.nz)
Amanda Capstick - Secretary to Lianne Jamieson/Maree Jones (amanda@turnerhopkins.co.nz)
Lisa Sinvichit - Debt Recovery/Credit Management (lisas@turnerhopkins.co.nz)
Maria Cotter - Credit Management/Accounts Receivables (maria@turnerhopkins.co.nz)
Robyn Trayes - Secretary - Gifting and Trusts (robyn@turnerhopkins.co.nz)
Shirley Reeves and Rosalind Ward - Our long serving and much loved receptionists
(shirley@turnerhopkins.co.nz; rosalind@turnerhopkins.co.nz)
Helen White - Office Manager and Trust Accountant (helen.white@turnerhopkins.co.nz)
Maritza McGuinness and Ria Muskitta - Accounts Clerks
(maritza@turnerhopkins.co.nz; ria@turnerhopkins.co.nz)
Recent additions to the firm are Douglas Mitchell who has joined Turner Hopkins after considerable experience in a large city firm specialising in insurance and civil litigation and Jane Polson who has also joined us from the city and who has a significant degree of experience in all areas of family law.
Finally we are very pleased to welcome Rachael Jhinku to the firm. Rachael is an experienced commercial/property solicitor who will now be assisting Mike Newdick and John Stirling.
EMPLOYMENT LAW
90 DAY TRIAL PERIOD INTRODUCED
The "90 day trial period" has received plenty of press coverage since it was initially proposed by way of an amendment to the Employment Relations Act. The amendment allows employers who have fewer than 20 employees to terminate the employment of new staff within the first 90 days of employment without fear of a personal grievance for unjustified dismissal; provided the parties have agreed to such a trial period in the employment agreement.
The amendments came into force on 1 March 2009. The date of determining whether the employer has fewer than 20 employees is the date the employment agreement was entered into. The legislation does not specify who is counted as an employee and so, potentially, casual and part-time employees could be counted. The following conditions apply to the trial period.
• It will only apply to employees who have not previously been employed by the employer.
• Both parties must agree to the trial period
• The trial provision must be a written provision in the employment agreement
• The trial period must not exceed 90 days - so it could be for a shorter period than 90 days
• During the trial period the employer may dismiss the employee by giving notice of termination
• The employer must give notice of termination to the employee within the trial period in order to be protected by the trial provision
• If the employee is dismissed they are not entitled to bring a personal grievance or other legal proceedings in respect of the dismissal
• Employees will still be able to bring personal grievance claims for unjustified disadvantage, sexual or racial harassment, discrimination or duress.
In all other respects the employee is to be treated no differently from other employees whose employment agreements do not contain a trial period. The obligation of good faith remains during the trial period with the exception that the employer is not required to consult and to provide information to the employee prior to termination.
Commentators have mixed views on the amendments. Australia and most other OECD countries allow trial periods.
The New Zealand Government has introduced this legislation in an effort to encourage employers to provide employment opportunities to people without financial risk to the employer if the employment relationship does not work out.
In an announcement on 11 December 2008 the Minister of Labour, Hon. Kate Wilkinson, stated that "By lowering the legal risks employers face, they will be more confident in giving people the opportunity to prove themselves" and that "The 90 day trial will provide real opportunities for people at the margins of the labour market".
Given that the trial period must be agreed between employer and employee, those employees who are in demand and have some bargaining power will no doubt attempt to negotiate the removal of the trial period.
Employment problems can take some time to surface so employers will need to be vigilant to ensure they act within the 90 day period.
Restructuring and Redundancy
The current economic climate has led to a number of businesses considering restructuring and this in turn leads to the prospect of redundancy. The legal obligations of an employer to ensure that a redundancy is performed both in a substantively justified manner and in accordance with the required procedure is significant. Even where the legitimacy of the redundancy is not in question a failure to comply with the procedural requirements could render the redundancy unlawful and result in a significant claim by an employee.
In particular employers should consider the following issues:
a) The reasons for the redundancy and the evidence that is available to support it;
b) The selection criteria involved in identifying the employee(s) to be made redundant;
c) The level of redundancy compensation payable;
d) The length of any notice period;
e) The employer's obligation to consult with the employee throughout the process;
f) The support to be given to the employee as part of the redundancy process and through the notice period.
It is our very strong recommendation that in any circumstances where a redundancy is being considered expert legal advice should be sought. Please contact Helen Wendelborn or Michael Robinson of this office should you require assistance in this regard.
tep 2: Identify the business responsible for sending the commercial electronic message and how they can be contacted.
Step 3: Include a functional unsubscribe facility in all commercial electronic messages.
We strongly suggest that you take time to review your business practices. We would be very happy to offer assistance to any clients who may require further advice in order to comply with these new legal requirements.
HOW TO GET PAID - FAST
Debtor Management for Small to Medium Sized Businesses
Turner Hopkins has recently developed a Debtor Management System for small to medium sized New Zealand businesses, which is designed to assist in the collection of debts in a highly cost effective and timely manner.
The processes we have developed can be broken down into three modules:
• The first module relates to ensuring the terms and conditions of trade (in other words the contract between our client and the debtor) is in the most up-to-date and appropriate form. A comprehensive term of trade agreement should provide for the following:
a) Guarantees by directors where the party obtaining credit is a company;
b) Personal Property Security Act registration in favour of the supplier;
c) Supply authority to the supplier to obtain credit references and list defaults through a credit reporting agency;
d) Allow the creditor to recover collection costs as well as legal costs and disbursements reasonably incurred in the case of a default.
We find that we are often able to quickly review our clients' existing terms of trade and supply appropriate amendments and suggested improvements at a very modest cost.
• The second component offers a fixed-fee follow up service, whereby a polite letter of demand is written to the debtor, and two follow-up phone calls are made. We then keep our client advised as to progress of the matter by email.
• Finally, we are able to commence legal action against a debtor for a fixed fee and in circumstances where a significant portion of the costs incurred can be recovered upon settlement. The legal process will need to be considered in each individual case and will depend on whether or not the debtor is a company or individual. Our clients are constantly and pleasantly surprised at the low costs at which we are able to commence legal proceedings.
In the current economic environment it is essential for business cashflow and liquidity to ensure that debt management systems are as efficient as possible.
We have a more detailed outline of these services available on our website (www.turnerhopkins.co.nz). Alternatively, we have prepared a brochure outlining our debtor management system. If you would like a copy of the brochure, please do not hesitate to call.
RECENT CHANGES IN PROPERTY LAW
Last year the Property Law Act 2007 came into force, replacing the 1952 Property Law Act and several other related acts, including a number of old English ones going back as far as 1257.
It has been described as the largest single change to property law in the past 55 years and is the culmination of a project that took over 16 years.
The aim of the Act is to create modern, more user-friendly legislation for people buying and selling property, mortgaging their property to raise finance, or entering into commercial leases of land.
Not everything in the Act is new, some parts of it repeat or codify the existing law. The following highlights some of the changes that have been introduced.
Landlord's Consent
If a tenant asks a landlord for permission to transfer or sub-lease premises to a third party, or to change the permitted use of the premises, the landlord must not unreasonably withhold consent. The landlord must respond in writing within a reasonable time. If consent is given subject to conditions or is withheld, the landlord must give reasons for their decision, if asked to do so by the tenant.
A range of parties affected by the decision may claim damages from a landlord if they suffer loss as a result of the landlord unreasonably delaying or withholding the landlord's consent.
Insurance Protection for Tenants
If the premises are damaged by an insured risk (e.g. fire, flood, explosion) the landlord and the insurers may not require the tenant to pay for the repairs. This is so even if the damage was caused by the tenant's negligence.
Distraint
The Distress and Replevin Act 1908 enabled a landlord to enter premises and seize certain chattels of the tenant if the rent was in arrears. This self-help remedy has been abolished.
Sale and Purchase - Return of Deposit
A purchaser of land now has a statutory right to apply to a Court for the return of the purchaser's deposit. The surrounding circumstances must be such that a Court would not order the purchaser to perform the contract and also that the purchaser has no right to cancel the contract.
An example could be where there is a defect in the property that the purchaser was not aware of until after signing the contract and paying the deposit.
The Court is also given the power to cancel the contract and declare that the purchaser has a lien on the land to secure payment of the refund.
Conclusion
The Act affects many facets of the law relating to property. It includes leases, sales and purchases, mortgages, access to land and special powers of the Court.
Chances are, if you are dealing with land in any way, the Act will affect you. With such a major law change, it is more important than ever to obtain property advice at the outset of any transaction.
We are always happy to receive enquiries concerning property and related issues.
Turner Hopkins Solicitors Nominee Company Limited
We would like to remind our clients and the other recipients of the Turner Hopkins newsletter our firm continues to operate Turner Hopkins Solicitors Nominee Company Limited (THSNCL).
THSNCL is a contributory mortgage company which receives funds from investors (contributors) which are then lent to third parties which have approached our firm seeking mortgage funding.
Our contributors receive a return of 8.5% per annum on the funds which they have invested through THSNCL. This interest is payable either monthly or quarterly.
The loans are for a period of between one and two years and as security a registered first mortgage is taken over the borrower's property. The loans represent no more than 50% of an acceptable registered valuer's recommendation of the value of the land, or in the case of improved land (i.e. land that has either a house or building erected on it) 66.6% of the valuer's recommendation.
The advantages of investing in a contributory mortgage company include:
• The investment is secured over a specific property as opposed to being part of a global fund;
• Investors can contribute as little as $5,000 to THSNCL and thus offer the contributor the opportunity to spread their investment risk;
• A contributor must consent every time their funds are invested and is provided with a copy of the relevant valuation being relied on before their consent is sought;
• Our policy is to normally keep loans under $500,000.00;
• Loans are normally secured against property in the Auckland region
If you have an interest in discussing further the merits of investing funds in THSNCL please do not hesitate to contact our Nominee Company Administration Manager Helen White on ph: (09) 486-2169 or helen.white@turnerhopkins.co.nz
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