Autumn 2015 Newsletter

Work life and private life – implications of social media

In the last decade the use of social media has exponentially expanded. Social media such as Facebook enable users to interact with large numbers of people, with immediate and permanent impact. Users of social media might assume that their use of sites such as Facebook in their own time has no relevance to their work life; however, the impacts of the use of social media can overflow from a user’s personal life to their work life, with serious effects on both employee and employer.

The effects of the use of Facebook in an employee’s own time were recently illustrated in an Employment Relations Authority (ERA) decision Blylevens v Kidicorp Limited [2014] NZERA Auckland 373. Kidicorp employed Ms Blylevens as a centre manager. A number of staff and parents made complaints about Ms Blylevens, which Kidicorp investigated.

During the investigation Ms Blylevens sought assistance from an advocate, Ms Rolston. While representing Ms Blylevens, Ms Rolston posted derogatory comments on her own business Facebook page. Ms Rolston made various comments in two separate posts about Kidicorp, including allegations of Kidicorp “removing unwanted staff”, “bullying”, describing HR as the “vindictive Kidicorp HR Krew” and stating that Kidicorp created a “toxic” environment. Ms Blylevens ‘liked’ Ms Rolston’s posts, and added her own comment to one of them, noting that it was “an interesting article” and “that as a parent looking for childcare it’s good to be informed”.

Ms Blylevens was identified on Facebook as an employee of Kidicorp, and her Facebook friends included other Kidicorp staff and parents. Ms Blylevens’ ‘like’ of the posts ensured that Ms Rolston’s derogatory comments were disseminated to a wide audience. Kidicorp had a social media policy that prohibited employees from posting information that could bring Kidicorp into disrepute or that could cause reputational damage. After Kidicorp became aware of Ms Blylevens’ actions in ‘liking’ and commenting on the derogatory posts, an investigation was launched. Ms Blylevens was dismissed for serious misconduct.

Ms Blylevens challenged her dismissal. The ERA found that her dismissal was justified. Ms Blylevens’ explanation that her ‘likes’ did not endorse or support Ms Rolston’s derogatory posts was not accepted. The ERA likened Ms Blylevens’ actions in ‘liking’ and commenting on the posts to her standing outside the childcare centre and handing out copies of Ms Rolston’s derogatory comments about Kidicorp while telling people “here is an interesting article – it is good to be informed”. The ERA had no difficulty in finding that Ms Blylevens’ actions breached her employee obligations of fidelity, loyalty and good faith.

This case clearly illustrates the need for employees to be mindful that their use of social media in their private capacity and in their own time may have unexpected implications for their employment. This case also provides employers with some assurance that if an employee is using social media in a way that may damage an employer’s reputation, an employer can consider disciplinary action.


Trust law: trustees’ duties – are you at risk?

You might have been asked by a friend or family member to be an independent trustee of a Trust. You may also have been appointed as an executor of someone’s estate, which will often also make you a trustee of the estate assets.

Trustees have strict duties to the beneficiaries of the Trust. Most duties are contained in the Trustee Act 1956. In certain situations trustees can be held personally accountable for their actions or for failing to act, so it is important trustees understand their rights and obligations.

All trustees must know the terms of the Trust (or the terms of the Will as the case may be), and must ensure the Trust (or Will) is managed in an efficient and economic manner. Trustees should take all precautions that an ordinary prudent business person would take in managing similar affairs of his or her own – a trustee must act with care and diligence. An independent trustee is not a ‘rubber stamp’, meaning they must not blindly agree with and follow the instructions of the remaining trustees or settlors; trustees must carefully consider their decisions.

Trustees have a duty to make prudent investments. This duty applies to the methods trustees use to make the investment, rather than looking at the actual results of that investment. A failed investment is not necessarily a breach of trust as long as the trustees acted prudently when choosing that investment.

Trustees must be impartial. They must consider the needs of each beneficiary and have a duty to manage the Trust assets in the best interests of those beneficiaries in accordance with the terms of the Trust deed or Will. Trustees must avoid being in a position of conflict between their duties to the Trust and its beneficiaries.

Trustees are accountable to beneficiaries. They must keep proper accounting records and may be required to give beneficiaries information and explanations as to the investment of and dealings with the Trust property.

A breach of trust by a trustee can mean he or she is personally liable to the beneficiaries for any loss caused, particularly if it was an intentional breach of trust, dishonesty or negligence that caused loss. If a trustee can demonstrate that he or she acted honestly and in good faith and that the breach of the terms of the Trust was unintentional on their part, that trustee would not ordinarily be liable to the beneficiaries for the consequences of their breach.

When a Trust enters into a contract with a third party the trustees will typically be personally liable to ensure that the contract is completed. They may have a right to be indemnified from the assets of the Trust (meaning the liability they incur will be paid for from the Trust assets); however they will lose that right of indemnity if they act in excess of their Trust powers or in breach of their Trust duties. In addition to this, any right to be indemnified is only useful if the Trust actually has realisable assets. Recent case law has seen an independent trustee personally liable for Trust IRD debt, as the remaining trustees had fled the country. While the independent trustee had the right to be indemnified, there were no Trust assets left to cover the debt. The independent trustee paid the IRD debt using their own funds.


Do you wish you could resolve a dispute yourself? If you do, attending private and confidential mediation may help.

From time to time disputes arise between people, for example, business partners, family members, neighbours, friends and associates, or work colleagues.

What is mediation? Mediation is a process by which parties themselves agree to sit down and see whether they can resolve the dispute with the aid of a neutral third party mediator. The mediator helps parties to:

You may be familiar with mediation in the context of alternative dispute resolution processes in employment relationships, or through the Family Court, however private mediation can occur when both parties agree to engage their own mediator. Mediation can provide both parties with an informal, quick and cost effective way of seeing whether disputes can be resolved in a manner that meets both parties needs and concerns.

If you would like to know more about mediation, Kath Taurau, lawyer and accredited mediator (through LEADR NZ), can answer any questions you might have. You can contact Kath directly on 09 407 0175 or at




Kath Taurau

We are pleased to welcome lawyer and mediator Kath Taurau back to the McLeods team. Kath returns to us after several years working as a barrister focussing on employment, resource management, mediation and Treaty of Waitangi work. We are excited to have Kath’s skill set and experience available to our clients. You can contact Kath on 09 407 0175 or

Reception Team

Our friendly new reception team in now made up of Margaret McLelland and Shirley Rundle, another returning staff member we are happy to have back.

Mangonui Pop-Up Office

Office open days are fortnightly on Mondays from 10:30 to 12:30 or by appointment.

Our clients living North of Kerikeri have commented they like the convenience of this service.

For more information, contact lawyer Sacha Yanke on 09 407 0178 or

All information in this newsletter is to the best of the authors’ knowledge true and accurate. No liability is assumed by the authors, or publishers for any losses suffered by any person relying directly or indirectly upon this newsletter. It is recommended that clients should consult a senior representative of the firm before acting upon this information.


Summer 2014 Newsletter

Love thy neighbour

Disputes with neighbours can arise over many things; noise, fences, trees and animals etc. Ideally, you and your neighbour should be able to resolve any problem by discussing it and acting reasonably. However, if this is not possible, the law may be able to help resolve the matter.


When you purchased your property, your lawyer should have shown you a copy of the Certificate of Title for the property. The Certificate of Title records the plan of the property and its boundaries with neighbouring properties that were determined by land transfer survey. It can be disastrous for a land owner to discover that they do not actually own all of the land they thought they did because they relied on fences and natural boundary markers, rather than the boundaries shown on the Certificate of Title.

Encroachment is where you or a previous owner of your property has erected a structure and part of the structure is on a neighbouring property. This is technically a trespass and the encroaching land owner is legally responsible, whether or not they erected the structure. The definition of structure includes any building, driveway, path, retaining wall, fence, plantation or any other improvement.

The Property Law Act 2007 enables a party to seek relief where an encroachment exists. Whether or not relief should be granted is an exercise of judicial discretion and must be considered “just and equitable” in the circumstances. Relief can be provided by directing that the structure be removed, granting an easement (or alternatively a right of possession for a specific time) over the land under the structure, or transferring that land to the person who owns the encroaching structure. If the wrongly placed structure is a fence, no relief may be granted if the dispute can be resolved under the Fencing Act 1978.

Boundary fences

The Fencing Act 1978 sets out the rights and responsibilities relating to fences between neighbouring properties. It provides a statutory framework to resolve disputes that may arise. This includes (but is not limited to) determining what constitutes an adequate fence, the cost of building or repairing a fence, who is responsible for those costs, and who is to do the work. Land owners can enter into agreements concerning fencing matters that can be registered against the titles of the affected lands for a period of up to 12 years after registration.

Overgrown trees

The overhanging of branches of your neighbour’s trees onto your property is also considered encroachment. You are allowed to cut the branches back to the point where the tree crosses the boundary; however it is a good idea to contact your local council to ensure the tree is not a protected tree or talk to your neighbour about it.

If your neighbour is not prepared to do anything, you are able to apply to the District Court for an order requiring your neighbour to remove or trim any tree if it is causing damage or injury, obstructing your view or otherwise reducing the enjoyment of your property or if it is diminishing the value of your house.

If any of these circumstances apply to you, we suggest you seek legal advice regarding your rights and responsibilities. Seeing a lawyer before a problem escalates can save you anxiety and money.

In a perfect world, you and your neighbour should be able to resolve any problem by discussing it together. The law is careful to balance one person’s right to enjoy their land with a neighbour’s right to be protected from interference.

If your neighbour’s pet comes onto your property without your consent, this is trespass and you have certain rights to remove the animal or have it removed. Interference with a neighbour’s right to enjoy their land can amount to legal nuisance if it is unreasonable and substantial. In most circumstances, the animal’s owner is liable for the damage it caused while trespassing. Most local councils have bylaws that place rules and requirements on owners for keeping domestic animals in towns and cities.

Dogs – the Dog Control Act 1996 sets out the legal obligations on dog ownership, including their care, control and the owner’s responsibilities for damage caused by their dog. Dogs must be under the direct control of their owners at all times. For example, if a dog digs up a neighbour’s plant, the neighbour can make a claim in the Disputes Tribunal if the dog’s owner does not agree to pay for the damage.

If a dog is causing a nuisance by persistently barking or howling, a complaint can be made to the Dog Control section of your local council. A dog control officer can give the dog owner a written notice requiring them to stop the nuisance, and if necessary, remove the dog from the property.

If you see a dog attacking a person or any stock, poultry, domestic animal or protected wildlife, you have a right to seize or destroy the dog in order to stop the attack. If the dog is seized, it must be handed to a dog control officer or the police who will either impound the dog or have it destroyed.

Cats – unlike dogs, cats are not closely regulated, and are allowed to trespass. The cat’s owner is not usually liable for any damage made by their cat.

Stock – stock owners are liable for any damage caused by their stock wandering onto the road if the owners have not taken sufficient care to prevent this from occurring. If stock trespass onto someone else’s land, the occupier of the land may impound the stock and seek damages under the Impounding Act 1955.

Noise & smell – if your neighbours, or their animals, are making excessive or unreasonable noise, a complaint can be made to the local council. An enforcement officer will usually investigate the complaint and decide what action should be taken under the Resource Management Act 1991. This will usually be either an excessive noise direction for a short-term problem (e.g. noise from a stereo) or an indefinite Abatement Notice for an ongoing problem (e.g. noise from a factory).

An application can also be made to the Environment Court for an Enforcement Order to stop an activity that is causing excessive or unreasonable noise.

The gathering of rubbish or unpleasant smells may amount to nuisance under the Health Act 1956 and be dealt with by way of enforcement orders or abatement orders as well.

Neighbourhood disputes are ideally suited to mediation and your lawyer can suggest a suitable mediator, if required.

Fixture or chattel – why should I care?

When buying or selling property, fixtures are generally included automatically, chattels are not. This can cause difficulty as it is not always clear whether something is a fixture or a chattel. Fixtures are usually fixed to, and form part of the land, whereas chattels are usually movable. To further refine the test, you will need to examine on a case-by-case basis why and to what extent the item is fixed to the land. It’s not always easy – these matters often end in dispute.

A dishwasher is arguably a fixture where it is plumbed and wired directly to the house and part of the cabinetry. It’s arguably a chattel if it rests on its own weight, has easily detached plumbing and a regular power plug.

To avoid confusion, write it down. If something should be included (or specifically excluded) record it in the agreement. If in doubt, seek advice!


Mangonui Pop-Up Office

We are pleased to announce our fortnightly pop-up office at 76 Waterfront Drive, Mangonui is now open to better serve our clients in the Far North.

Our staff solicitor Sacha Yanke, a Taipa local, is excited to be able to provide this service in the community she has grown up in.

Christmas Hours

Our office will close at midday on Tuesday 23 December 2014 and will re-open on Monday 12 January 2015 at 8:30am.

Our Mangonui Pop-up Office will open on Monday 2 February, and fortnightly after that.

The team at McLeods Lawyers wish everyone a happy Christmas and great New Year.


Autumn 2014 Newsletter

Your duty of disclosure to your insurer

Have you ever had that nagging feeling that your insurer might, just might, find a reason not to pay out on a claim?

We all deal with different kinds of insurance; house, contents, life, health, travel, mortgage, income protection, professional liability, public liability, earthquake, builders risk, and, if you want to believe, some foreign providers even offer a policy protecting against alien abductions.

No doubt you read your insurance policies in detail and are aware of the circumstances in which your claim can be refused (for example if you snow-ski overseas, injuries that occur while off-piste are typically excluded from travel insurance).

Duty of disclosure

In New Zealand the insurer has a right to refuse a claim if you, the insured party, failed to disclose something that may have influenced their decision as a prudent insurer to offer you insurance in the first place. This is known as your duty of disclosure. You are obliged to update your insurer with relevant information every time your policy is renewed or varied.

Breach of the duty may have disproportionately harsh results

Your failure to disclose a material circumstance allows your insurer not only to refuse a claim, but to treat the contract of insurance as never having existed. A flow on effect is that successful claims you have made in the past could also be reversed.

The problem we face is that the consumer would typically only become aware that their policy is void when they make a claim, as this is usually the only time the insurer makes a thorough investigation of your particular affairs. Some examples where policies were cancelled for non-disclosure include:

What the insured must disclose is inherently uncertain

An insurer will usually ask you many questions to determine your premiums and level of cover, however the questions they ask are non-exhaustive and do not excuse you of your duty of disclosure.

Difficulties arise because the ordinary consumer does not have a sophisticated knowledge of insurance law. An ordinary consumer might diligently and honestly complete a detailed insurance application, overlook some piece of information they have no idea would be relevant to the insurer (and was not asked for by the insurer), pay years of premiums only to find when making an eventual claim that their policy is void.

The New Zealand Law Commission has been unsuccessfully advocating to ease the obligations on the consumer since the late 1990s to bring us more in line with the legal position in the UK and Australia. The simple advice under the current regime is to review your new or existing policy document carefully and disclose everything you possibly can to your insurer and let them decide what is relevant. If this results in a higher premium – you can take comfort knowing you are now less likely to have a claim rejected due to non-disclosure.


Makeover for trust law proposed

The Law Commission feels a new framework is needed to provide a clear and robust approach for trusts in the 21st Century. They are undertaking a three part review of trust law in New Zealand and presented the first report to Parliament on 11 September 2013.

The Law Commission report focuses on the essential nature of trusts and recommends the introduction of a new Trusts Act (‘new Act’) to replace the Trustee Act 1956, which the Commission believes has become outdated. A selection of the recommendations in the report are summarised below:

 Core trust concepts


 Court powers and jurisdiction

General trust issues

While many of the recommendations simply clarify the existing law, the Commission recognises the new regime will widely impact the estimated 300,000 – 500,000 trusts currently in New Zealand.

Whether the Government approves the report remains to be seen. In the meantime, the Commission will continue with the final two stages of review, which relate to charitable trusts and corporate trustees. For a full list of the proposed changes refer to the Commission’s website:


Redundancy pitfalls for employer

An employer may make an employee redundant on the basis that there is a genuine work-related reason or business decision for that redundancy. It must be about the employee’s position, not the employee personally.

In Totara Hills Farm v Davidson (‘Totara’) the courts demonstrated that they may examine the reasons behind such a business decision, to ensure it was fair and reasonable in the circumstances, and not a cover for some other reason for the dismissal.

In Totara, the Employment Court determined that although the redundancy did relate to a genuine business decision (to save costs), the savings would not actually be achieved by the dismissal. Because of this, the dismissal was held to be unjustified.

Totara highlights the burden on employers to ensure that when they make an employee redundant that not only should it be the result of a genuine business decision, but also that the redundancy will actually achieve the intended results of that decision.


Nothing like some friendly competition between staff members.

Not only does one lucky person who likes our Facebook page between now and the 31st March 2014 get a $25.00 Makana Voucher, to be drawn on 1st April 2014 but also one lucky staff member with the most friends to like our page will receive a $25.00 voucher.

 New Star to Join the Team

We have a new lawyer, Sacha Yanke starting on 17th March 2014.  Sacha is from Taipa originally and is coming to us from a larger firm in Auckland.

Welcome Sacha.

All information in this newsletter is to the best of the authors’ knowledge true and accurate. No liability is assumed by the authors, or publishers for any losses suffered by any person relying directly or indirectly upon this newsletter.  It is recommended that clients should consult a senior representative of the firm before acting upon this information.

Summer 2013 Newsletter

DIY and the Law

Many New Zealanders are capable of conducting DIY (do-it-yourself) repairs, maintenance and redecorating to their homes. However, it is important to be aware of the restrictions, standards and possible penalties imposed by law.

Under the Building Act 2004 (‘the Act’), all building works (whether construction, alteration, demolition or maintenance of new and existing buildings) must comply with the Building Code. Whether you intend to do-it-yourself or engage a professional, all building work must comply with the minimum level of standard imposed by the Building Code.

Before doing any alterations or renovations, it is crucial that you check with your local council to see whether a building consent is required for what you have in mind.

Under the Act, there are certain building works that may be carried out without obtaining a building consent. Schedule One of the Act provides a detailed list of exempted works. Popular examples include: building a patio or deck at ground level or garden trellis less than two metres high, replacing spouting or a piece of weatherboard, building a small garden shed, or replacing a hot water cylinder.

It is important to note that building works exempted under the Act may not be permitted if that building work is in breach of any other act. For example, there is a limited amount of electrical and plumbing work you may complete without a qualified electrician or plumber and gas fitter.

If the intended building work is not exempt under the Act, then it is likely that these works will be restricted building works and a building consent must be obtained and the work carried out or supervised by a licensed building practitioner. In those circumstances, it is recommended that you inform your insurance provider of the proposed work.

Popular examples of restricted building works include: structural building (additions, alterations, re-piling and demolition), plumbing and drainage (except repair and maintenance of existing components), relocating a building, installing a wood burner or air-conditioning system, building a retaining wall higher than one and a half metres, fences or walls higher than two metres, all swimming pools and their associated fences, and decks, platforms or bridges more than one metre above ground level.

In certain circumstances, you are able to claim an exemption as an owner-builder to carry out restricted building work on your own home when you apply for a building consent. To be considered an owner-builder, you must live in or be going to live in the home, carry out restricted building work to your own home yourself, or with the help of unpaid friends and family members, and have not carried out restricted building work to any other home within the previous three years under the owner-builder exemption.

Failure to adhere to the Act could result in a fine of up to $100,000, plus up to $10,000 for each day the offence continues. You could also be forced to pull down or make changes to the home or building. Furthermore, the sale of the home or building at a later date could be impacted at the owner’s cost due to the vendor’s warranties provided under the current REINZ/ADLS Agreement for Sale and Purchase of Real Estate.


The America’s Cup: Battles off the Water

On 25 September 2013, Oracle Team USA completed a comeback against Emirates Team New Zealand, from an 8-1 deficit, to clinch the 34th America’s Cup in San Francisco.

Oracle won 11 races on the water in all, overcoming a two point penalty imposed by the International Jury on 3 September 2013. In the end the penalty didn’t decide the winner; but it easily could have. When Oracle became the first to win nine races it was speculated that had Team NZ won at that point, Oracle would appeal the jury decision and the Cup would once more become embroiled in the court room battles it is now famous for.

It would not have been the first time New Zealand was involved in a legal stoush over the Cup. In 1987, Michael Fay’s challenge on behalf of the Mercury Bay Boating Club ended up in the New York Supreme Court. Mercury Bay won the right to challenge, but unfortunately did not win the race. The San Diego Yacht Club (represented by Dennis Conner) was ordered by the Court to meet the challenge on the water. However, as the parties had not agreed to any rules, Dennis Conner entered a catamaran and easily won. Mercury Bay brought the case back to the Court to disqualify the catamaran. Initially this proved successful and it was awarded the Cup. However, on appeal the decision was overturned.

In reaching its decision the NY Court of Appeals strictly interpreted and applied the terms of the Deed of Gift, the founding document that established the competition after the race around the Isle of Wight in England in 1851.

The Deed sets out default rules for future races if the parties cannot agree. In the Mercury Bay case however, the Court found that the Deed did not specify the type of yacht and on this basis decided the catamaran was legal. On the back of this decision in 2010, when Alinghi and Oracle could not agree on the rules for the 33rd America’s Cup, they also adopted multihulls.

In every other America’s Cup the parties have been able to agree on the rules, which are known as the Protocol. In San Francisco the Protocol extended to establishing the International Jury, as an arbitral body, to determine any disputes that may arise. These rules provide that any decision of the Jury is final and binding and that if a party refers a dispute to a court rather than the Jury, it would be ineligible to compete.

These provisions effectively removed Oracle’s ability to appeal the penalties that had been imposed.

However, Oracle’s concern was that members of the Jury that had investigated the cheating allegations had also decided the case. This was arguably a breach of due process and although the Jury was entitled to decide its own procedure, as an arbitral body, the procedure could have been challenged if it breached the applicable US law. While it was unlikely, if that had occurred, for the Court to substitute its own decision for that of the Jury, it is possible the Court could have referred the case back to the Jury to adopt a conforming procedure and decide the matter again. If that had happened, it would have left the Jury ultimately responsible for deciding the winner of the Cup.


Introducing Eddy

‘Eddy’ the Legal Eagle has been sun bathing outside our office in November as part of the Garden Safari Scarecrow.

Well done to staff members Judith and Louise for putting him together.

Christmas Break

Our office is closed from 12 noon Friday 20th December and will re-open at 8:30am on Wednesday 8th January.

Our Senior Solicitor Louise Smith will be on extended leave early next year spending time with her youngest son before he starts kindergarten.  We wish Louise all the best and look forward to her return to work in May 2014.

All the best for the festive season from the team at McLeods.

All information in this newsletter is to the best of the authors’ knowledge true and accurate. No liability is assumed by the authors, or publishers for any losses suffered by any person relying directly or indirectly upon this newsletter.  It is recommended that clients should consult a senior representative of the firm before acting upon this information.

Spring 2013 Newsletter

Estate Planning – Residential Care Loans

One of the most vexing questions that we face as we get older is how we will provide for ourselves into our retirement. This necessarily includes planning to ensure that we have sufficient funds to meet our costs in the event that we are placed into long-term residential care or a rest home. In order to determine how much we will have to contribute to the costs of long term residential care, we need to be aware of the maximum asset threshold, above which we will no longer be eligible for a residential care subsidy (‘the Subsidy’).

The Subsidy

The threshold is reassessed on 1 July each year. From 1 July 2013 the threshold has been set at $215,132 for single people or for couples who are both in residential care. For a couple where only one of whom is in residential care the threshold is $117,811, when the value of the home and car is excluded, or where combined total assets exceeds $215,132. Couples can only elect to have their assets excluded from the assessment where it is the principal residence of either a dependent child or the spouse or partner, who is not in residential care.

In assessing the eligibility for the Subsidy, Work and Income New Zealand (‘WINZ’) may include in your assets any gifts that you have made of more than $6,000 per annum over the preceding five years. WINZ may also include in your assets any one off gifts of over $27,000 per couple made prior to the five year period immediately preceding the application being made.

For those people who have assets above the maximum threshold and accordingly do not qualify for the Subsidy, WINZ offer a residential care loan scheme (‘the Loan’).

 The Loan

The Loan is interest free and secured by a caveat registered over the borrower’s home. This caveat prevents the property being sold until the debt owed to WINZ has been repaid in full.

You can apply for a reassessment of your eligibility for the Subsidy when your assets have decreased below that maximum threshold for the Subsidy.

The Loan can be drawn down at the rate of the maximum contribution towards residential care costs. From 1 July 2013 the maximum contribution ranges from $819 to $900 per week depending on where you reside. This equates to between $42,588 and $46,800 for each 12 month period spent in residential care, while you remain ineligible for the Subsidy.

The Loan has to be repaid either within six months of the death of the borrower or when the home is sold, whichever comes first.

Given the modest threshold above which a person is not eligible for the Subsidy and the high weekly costs of the maximum contribution it is imperative that planning for retirement and asset protection begins as early as possible.


Going into Business – an Overview of Why You Need a Shareholders’ Agreement

A Shareholders’ Agreement is a contract between the shareholders of a company. While it is not compulsory, a Shareholders’ Agreement is good way to provide some certainty in a business relationship, and can be as detailed or as simple as you would like. Without one, you risk a dispute at some point down the track when each shareholder has a different idea of who can do what, when they can do it and how it is done. Like a pre-nuptial agreement – you do not really need one, until you need one (at which time it is too late). Shareholders’ Agreements are also popular because unlike a Constitution, they are not registered with the Companies Office, so they are not publicly available.

Typically a Shareholders’ Agreement is signed at the outset of a business arrangement, but it is never too late – they can be entered into at any time with the agreement of the shareholders. It will usually record (amongst other things):

Are you compatible with the other shareholders?

Perhaps the most important role of a Shareholders’ Agreement is to ensure the parties are on the same page from the outset. When preparing the agreement the parties will need to consider how the business will operate. Can you agree on the role each party will have, who will provide security for company finance or what should happen if one party does not meet their obligations? If you cannot agree now, you will find it hard to agree later.

What are my shares worth?

The Companies Act does not prescribe how shares should be valued if one party wants out, and it is not always as simple as you may think. It can be notoriously hard to agree on a timeframe, process, and the value of the shares when one party is exiting the company. Many Shareholders’ Agreements will record the agreed process for when one party wants to sell their shares, reducing uncertainty and the risk of dispute.

How much control will each party have?

Shareholders own the company, while the directors manage the company. A Shareholders’ Agreement can record who can appoint directors, and what decisions the directors can make without reference to the shareholders. You might agree for example that some decisions need the approval of all shareholders, while others need a majority of shareholders, or can be made unilaterally by just one director.

Removing a shareholder / director

Your Shareholders’ Agreement might record different circumstances in which a shareholder or director can be removed. For example, if a shareholder or director has breached an essential term of the Shareholders’ Agreement, acted dishonestly or in a way that is detrimental to the business, they can be removed. This can be easier than relying on the provisions of the Companies Act, which can be limited.



Warmer Weather Ahead

Spring is here and the weather is finally warming up.  Sarah’s daughter, Rory has been visiting Roland’s Wood and having fun playing amongst the bluebells.

Walking Stars

The Cancer Society is having a fundraiser night time half marathon in Auckland on 30 November starting with a street party at 7.00pm, followed by the walk (finishing by 2.00am) during which a torch is carried in remembrance of those affected by cancer.  This event is known as “walking stars”.

The route takes walkers around some of the city landmarks.  The target is for each team to raise approx. $150.00 per head.

There are twelve women participating in the walk from Curves, Kerikeri, including Judith Graham from our office.  The team is fundraising including promoting the premiere of the movie “About Time” on 23 October and raffles.  People can also make donations online in sponsorship of their team by going to  You can also visit the “Walking Stars” website to make a donation.

New World Mini’s

Most of you will know or have heard about the New World minis craze.  The miniature grocery items have been a very successful marketing campaign for New World with full sets being listed on Trade Me with starting bids of $160.00.

One of our own staff members has been busy trying to collect a full set by swapping the minis not needed for ones required on facebook, even though she is doing this to collect a full set for a friends grandchildren she does seem rather excited about it.

QR Code

You may have seen these around, we now have our own.  Feel free to give it a try.


All information in this newsletter is to the best of the authors’ knowledge true and accurate. No liability is assumed by the authors, or publishers for any losses suffered by any person relying directly or indirectly upon this newsletter.  It is recommended that clients should consult a senior representative of the firm before acting upon this information.

Winter 2013 Newsletter

Homeowner Beware!

For most homeowners in New Zealand, their home insurance has always been an unspecified ‘replacement’ cost based on the floor area of their home. However, following the Christchurch earthquakes, insurers are now adopting a new home insurance policy whereby all home insurance policies will be based on an ‘insured sum’.

The policy change is a result of major reinsurers (the insurance companies who insure our local insurance companies) requiring greater clarity on risk and the maximum costs to rebuild the homes they insure. Many insurers claim that the changes are about providing certainty and managing affordability for homeowners, and that costs of premiums for home owners will not change.

The result is that the onus is now on homeowners to get their home valued correctly as the insured sum will be the maximum amount the insurers will cover in the event of a claim.

The Insurance Council of New Zealand and the majority of insurance companies have published information online, and provided fact sheets and valuation calculators to inform homeowners and assist them to calculate the insured sum for their home.

In order to determine the sum to be insured, homeowners must determine the cost of completely rebuilding their home. Accordingly, it is paramount for homeowners to be aware of the unique features of their home. These include:

The insured sum does not include the value of the land on which the home is situated, or what it would cost to buy your home. Therefore the purchase price, rates valuation, or other estimate cannot be relied upon to determine the home’s value or insured sum.

In addition to calculating the value of the sum insured, each year homeowners must also determine the adequacy of the sum insured and keep their insurers updated upon renewal of their insurance policy. This is crucial for homeowners who complete renovations or changes to their home to guarantee that those works (and the possible increase in value) are covered by their insurance policy.

Obviously, this is a significant change to the duties of the insurer, and shifts the onus to the homeowner to correctly value their home and the insured sum. Homeowners need to be proactive, as many insurers have already transitioned all new home insurance policies to the ‘sum insured’ base, and all existing policies are likely to change at the time of renewal. One of the main consequences for homeowners, if they fail to adhere to the new policy, is that a default sum for the home will be calculated by the insurers which may not reflect its true value or the costs likely to be incurred in replacing the home.

For most people their home is their most valuable possession, consequently homeowners need to be aware of the terms of their insurance policy, and be proactive in contacting their insurer to ensure their home is adequately protected. If you have any queries regarding your home insurance policy you should contact your insurer immediately. If you have any issues regarding insurance claims, it is prudent to obtain legal advice.


Relationship Property After Death

Part 8 of the Property (Relationships) Act 1976 (‘the Act’) deals with the division of property where a marriage relationship or de facto relationship ends (after 1 February 2002) because one of the parties has died.

The basic scheme of the Act for relationships ending on death is that surviving spouses or de facto partners have a choice between two options; Options A and B, outlined as follows.

The Options

Option A is the ability to apply for a division of the relationship property under the Act and Option B is not to apply for a division of the relationship property and instead rely upon the provisions of the deceased’s Will.

Choosing one of the options is a formal process that must be made by completing and signing a written notice. The notice must include or be accompanied by a certificate signed by a lawyer certifying that the lawyer has explained the effect and implications of the option chosen. It also needs to be lodged with the administrator of the estate.

There are also important time limits that apply to the election of an option. Where the estate is small enough not to require a grant of administration, the choice must be made within six months of the date of death, or, if administration of the estate is granted within that period, then within six months of the grant of administration. In all other cases it is within six months of the grant of administration. The time limit is important because the administrator of the estate may distribute the estate if no election has been made within the six month period, and once distributed it cannot be undone.

If Option A is chosen there is also a time-frame for the filing of the proceedings in court.

There is one important distinction between spouses and de facto partners in regard to the choice of options. Spouses have the right to choose Option A irrespective of the duration of the relationship, whereas de facto partners have that right only if their relationship lasted for three years or more; unless the court is satisfied that there was a child of the relationship or the surviving partner made a substantial contribution to the de facto relationship, and not having Option A would result in substantial injustice.

 Option A

Generally speaking, choosing Option A means the equal sharing regime applies and that your lawful entitlement takes priority over the terms of the Will and you do not receive what has been provided for you under the terms of the Will.

 Option B

Under Option B the surviving spouse or partner elects not to apply for a division of the relationship property, but to inherit any provisions made in the deceased’s Will or available under intestacy provisions.

Option B is the default position if the survivor does not choose Option A within the time limit as detailed above, and in the manner prescribed.


The election of Option A or B may result in vastly different outcomes and therefore it is crucial that you obtain proper legal advice about this election and the time-frames that apply to this election.




Our website and facebook page has had an update including new photos of Graeme McLelland, Sarah Jury and Louise Smith.  Please feel free to have a look at  We also regularly add articles of interest to our facebook page, please like us on facebook so you receive notifications of these postings.

 Staff Changes

Graeme McLelland’s legal executive Fianach Reeves has moved on.  We wish Fi all the best in her new endeavours.  Eimear Nelley (previously at reception) is bravely stepping into her shoes.  Did you know Eimear is an Irish-qualified Solicitor who has played rugby for the Irish Womens Rugby Team?  Check out our facebook page for more information.

Graeme McLelland is also back in the office at 110% after undergoing open heart surgery in July.

Those of you who know Graeme will know he has always prided himself on being fit and healthy, and has managed to be back at the office only 3 weeks after his surgery (half the recommended recovery time).


All information in this newsletter is to the best of the authors’ knowledge true and accurate. No liability is assumed by the authors, or publishers for any losses suffered by any person relying directly or indirectly upon this newsletter.  It is recommended that clients should consult a senior representative of the firm before acting upon this information.

Autumn 2013 Newsletter


Acting as a guarantor for someone, often in respect of payment of money, means that you agree to meet their obligations if they do not. Guarantee clauses are common in leases, hire purchase agreements, and in general dealings with a bank. There are potential pit-falls for you to consider when agreeing to be a guarantor.

Signing a Guarantee

A guarantee agreement must be in writing and must be signed by the guarantor. It is advisable that if a party is signing in another capacity as well, that they sign the contract twice, once in their capacity as borrower (e.g. as a director of a borrowing company), and once as a guarantor.

Types of Guarantees

There are many different types of guarantees, varying from a specific guarantee to cover a particular transaction, a continuing guarantee limited to a fixed amount through to a continuing guarantee where the guarantor agrees to meet all obligations of the other party. Many guarantee documents include both a guarantee and an indemnity, which means that not only is the guarantor guaranteeing the obligations will be met, they agree to protect the receiver of the guarantee from any harm or loss.

In most contracts where there is more than one guarantor, they are treated as being “jointly and severally liable”. This means the creditor can choose to pursue whomever they like to recover the debt. Even if you are only one guarantor amongst many, you may find yourself held liable for all of the debt. In this case you may have a right to compensation from co-guarantors, but enforcing this right can be a lengthy and costly process.

Rights and Obligations of the Guarantor

As a guarantor who has been called upon by a creditor to pay a debt, you have a right to require repayment by the original debtor. Of course in practice, this right may not amount to much protection as often the creditor is enforcing the guarantee due to the inability of the debtor to make a payment. A guarantor can however use the securities available to the original creditor. In other words, if a debt secured by a mortgage is paid in full by a guarantor, the guarantor is entitled to take over that mortgage security.

Independent Legal Advice

Creditors rely on a guarantor making an informed decision. To ensure their guarantee is enforceable creditors should disclose to the guarantor information about the obligations they are guaranteeing and be satisfied that the guarantor appreciates the risk they are assuming. The Code of Banking Practice goes further, by requiring that prospective guarantors be advised to seek independent legal advice. The party providing legal advice is then required to confirm the guarantor understood the obligation they were assuming at the time they entered the guarantee.

Diligence Required

If you decide to act as a guarantor for someone, including close friends and family, you should familiarise yourself with their financial position, read the contract very carefully and obtain legal advice to determine what your liability might be. Everyone is naturally optimistic when it comes to their family and friends, but it is vital to be aware of the risk you are assuming and make an informed decision.

Other Options

Entering into a guarantee for someone else’s bank loan (for example providing a guarantee for your son or daughter’s loan) is often a very risky way of achieving you objective. This is because the banks will often request that you give an all obligations guarantee, meaning that you will be liable for all existing and future borrowing of your son/daughter, until you withdraw the guarantee and even then you will be liable for all borrowing up until that point. However there are options available to you.
These include:

If you are looking at entering into a guarantee, call us to advise you on the pitfalls and options available to you – Louise Smith 09 407 0175, or Graeme McLelland 09 407 0179.

For Richer, For Poorer – Contracting Out of the Property Relationships Act 1976

The Property Relationships Act 1976 (‘the Act’) applies to all relationships including marriages, de facto relationships and same sex relationships.

The defining feature of the Act is that it provides for the equal sharing of the assets and liabilities of the relationship irrespective of the differing financial contributions of either partner throughout the relationship. In many cases this includes situations where one party may have brought significantly more assets into the relationship than the other.
The equal sharing provisions of the Act apply to all relationships exceeding three years duration.

Parties may enter into an agreement to contract out of the equal sharing provisions of the Act (“Contracting Out Agreement”). In order for a Contracting Out Agreement to be enforceable, it must be in writing. Each of the partners must also have obtained legal advice before signing the Contracting Out Agreement. Each lawyer must also sign, certifying that they have provided independent legal advice and witnessed their client’s execution of the document.

Contracting Out of the Act becomes especially important when there is a disparity in the financial positions of the partners. This disparity in the financial positions of the parties arises where one party brings greater net assets into the relationship than the other.

In the absence of a properly signed Contracting Out Agreement the equal sharing provisions of the Act will apply. In the event that the partners separate without entering into a Contracting Out Agreement the effect can be a net transfer of assets from the wealthier partner to the less well off partner.  This can be particularly upsetting for the wealthier partner if that separation occurs close to retirement age where there is limited opportunity to recover financially.

The impact of the equal sharing provisions on the wealthier partner is magnified if that person has the misfortune of experiencing two or more separations without protecting their interests by entering into a Contracting Out Agreement. This can have the effect of halving that person’s net worth each time they separate from a three year relationship.

Inheritances and gifts are generally considered to be the separate property of the partner to whom the gift or inheritance was given. However, when for example this gift or inheritance is applied to repay the loan for the family home and the partners go on to separate, the non inheriting partner is entitled to benefit from half of the inheritance applied to reduce the borrowing for the family.

Assets in a Family Trust are not necessarily protected from potential relationship property claims. In circumstances where the Family Trust was settled during the course of the relationship or where relationship property has been applied to sustain trust assets, the Trust can become tainted as relationship property. This most commonly occurs when the income of one or both partners is used to meet the loan obligations for property owned by the Trust.

A Contracting Out Agreement is fundamental for anyone in a relationship wishing to secure their assets, especially a partner entering into a second or subsequent relationship, or where there is a significant disparity in wealth at the outset of the relationship.

We consider a properly drafted and advised upon Contracting Out Agreement to be a valuable asset protection mechanism, protecting against a significant and common threat.

Contact Sarah Jury on 09 407 0176 to discuss how a Contracting Out Agreement can help protect your assets.


New Faces

We are please to welcome Maree Walthall and Eimear Nelley at reception after saying goodbye to Odette Colebrook, who has left us to study at university. Find us on Facebook to learn a bit more about our staff members (hint: Maree is originally from the UK and into motorbikes and Eimear is an Irish-qualified solicitor who has played rugby for the Irish Women’s rugby team),
Kerikeri High School student Aimee Page has also joined us, helping out after school.


We are excited to be working with Kerikeri Plunket to provide sponsorship and help to this organisation that is so relevant and helpful to our staff, clients and their families. We will be providing more details of this in the coming months – stay tuned on Facebook.

All information in this newsletter is to the best of the authors’ knowledge true and accurate. No liability is assumed by the authors, or publishers for any losses suffered by any person relying directly or indirectly upon this newsletter. It is recommended that clients should consult a senior representative of the firm before acting upon this information.

Summer 2012/2013 Newsletter

New Auckland District Law Society (ADLS) forms

The Auckland District Law Society periodically updates its legal forms to keep them current and reflect new laws or practices. The legal forms provided by ADLS are used as standard forms throughout New Zealand This year has seen the introduction of a new edition for both the agreement for sale and purchase of real estate and the deed of lease.

ADLS Agreement for the Sale and Purchase of Real Estate

This Agreement is the most common contract used for the sale and purchase of real estate throughout New Zealand.

Building Report Clause

Amendments included the introduction of a pre-prepared clause for the purchaser’s use when making the Agreement conditional upon a satisfactory builder’s report. This clause is included by indicating ‘yes’ on the front page of the Agreement, similar to a LIM report condition.
Previously, specific building report clauses were frequently prepared and inserted by the agent or purchaser’s solicitor. These were contractual terms recommended to a purchaser to benefit them and protect their interests

The New Clause

The details of the building report condition are in clause 9.3 of the Agreement. It records that the Agreement is conditional on the purchaser obtaining a satisfactory building inspection report, with the purchaser to advise within 10 working days if the building report is unsatisfactory. Crucially, the clause contains the requirement that this report be “prepared in good faith by a suitably-qualified building inspector in accordance with accepted principles and methods”.

‘Suitably Qualified’?

The meaning of “suitably qualified building inspector” is vague, with a builder or at least someone experienced

in the building industry envisaged. The ADLS have indicated that in principle this can include an ordinary builder, provided the builder has experience in the particular type of building that is being inspected.

It is in the purchaser’s best interest to obtain a thorough inspection and report from a builder or specialised building inspection company that is experienced in inspecting properties and has appropriate liability insurance in place. A purchaser cancelling the agreement based upon a building report must, if requested, immediately provide a copy of the report.
It is possible that purchasers who attempt to avoid agreements may find themselves being challenged by vendors, as the clause requires an objective assessment of the property. As yet it has not yet been established what issues will be too insignificant to justify cancellation. Regardless of the provisions of the clause, it may still be possible for parties to co-operate and agree for any issues raised in a builders report to be remedied prior to settlement.
The new clause may not always meet your needs. A vendor of a building with identified issues may want the option of undertaking the works prior to settlement, to prevent the sale being cancelled once an inspection has been obtained. It is always prudent to seek legal advice before signing an Agreement, to explore alternative or additional provisions as necessary.

Vendor’s Warranties

The new Agreement also includes a change in the wording to the vendor’s warranties regarding works completed on the property by the vendor.
Clause 6.2 (5) now provides that “to the vendor’s knowledge, the works were completed in compliance with (those) permits or consents”. (the phrase “to the vendor’s knowledge” has been added). This is intended to reduce the liability of a vendor in circumstances where (for example):

Electronic Settlement

Settlement of the sale electronically by same day cleared payment (an electronic secure system administered by the banks) is now required by the Property Law Section guidelines and the Agreement except in specific circumstances when it is not possible. This reflects existing procedure.

For advice on the best way of selling or buying your property, before you sign, contact Graeme McLelland (407 0179) or Sarah Jury (407 0176).

Deed of Lease

“Christchurch” Amendments

The earthquake in Christchurch has highlighted several problems with previous versions of the deed of lease. The new deed of lease includes several amendments to address these problems, including:

Access for works:

New clause 15.1 allows the landlord access to the premises to inspect and carry out repairs (on reasonable notice unless it is an emergency). This clause has been drafted with building strengthening works in mind, but will apply in other circumstances.

New clause 15.2 provides for the abatement of a fair proportion of rent and outgoings if the tenant’s business use is materially disrupted due to the landlord’s works under clause 15.1

New clause 15.3 allows the landlord to require the tenant to vacate the whole premises if reasonably required to complete the repairs under clause 15.1

New clause 15.4 requires the landlord to act in good faith and have regard to the nature, extent and urgency of the works when exercising the landlord’s right of access or possession under these clauses.

Please note this is only a brief look at the changes and updates to these forms as we do not have room to cover all of the changes.

For advice on commercial leases please contact Louise Smith (407 0175) or Sarah Jury (407 0176).


Merry Christmas in Legal Terms

Please accept without obligation, express or implied, these best wishes for an environmentally safe, socially responsible, low stress, non addictive, and gender neutral celebration of the winter solstice holiday as practised within the most enjoyable traditions of the religious persuasion of your choice (but with respect for the religious or secular persuasions and/or traditions of others, or for their choice not to practise religious or secular traditions at all) and further for a fiscally successful, personally fulfilling, and medically uncomplicated onset of the generally accepted calendar year (including, but not limited to, the Christian calendar, but not without due respect for the calendars of choice of other cultures). The preceding wishes are extended without regard to the race, creed, colour, age, physical ability, religious faith, choice of computer platform, or sexual preference of the wishee(s).

A surgeon, an architect and a lawyer are having a heated barroom discussion concerning which of their professions is actually the oldest profession. The surgeon says: “Surgery IS the oldest profession. God took a rib from Adam to create Eve and you can’t go back further than that.”

The architect says: “Hold on! In fact, God was the first architect when he created the world out of chaos in 7 days, and you can’t go back any further than THAT!”

The lawyer smiles and says: “Gentlemen, Gentlemen…who do you think created the CHAOS??!!”

As the lawyer woke up after surgery, he said” “Why are all the blinds drawn?” The doctor answered: “There’s a big fire across the street, and we didn’t want you to think the operation was a failure.”

Eftpos, Master Card and Visa are now available at our office.

All information in this newsletter is to the best of the authors’ knowledge true and accurate. No liability is assumed by the authors, or publishers for any losses suffered by any person relying directly or indirectly upon this newsletter. It is recommended that clients should consult a senior representative of the firm before acting upon this information.

Spring 2012 Newsletter

The Accident Compensation Corporation

There has been a lot of discussion in the news about ACC recently following the difficulties ACC has experienced with release of personal information, and budgetary issues affecting ACC. New Zealand’s ACC system is unique in the world and means that the culture of suing people for personal injury, as shown in many American, English and even Australian television shows, is not possible here. So why is there no right to sue for personal injury in New Zealand? and how does it work?

What is the ACC?
The Accident Compensation Corporation (‘ ACC’) is a New Zealand Crown Entity set up under the Accident Compensation Act 2001 (‘the Act’) that is responsible for providing accident insurance for all personal injuries. The ACC scheme is administered under a ‘no fault’ system, which means that a person is covered for an accident regardless of how the accident occurred or who caused it. This system effectively means that individuals give up the right to sue others for damages following an injury in return for receiving personal injury cover. ACC’s main purpose is to promote injury prevention measures, provide rehabilitation and compensation to those eligible under the Act.

ACC cover is available for personal injuries ( being physical injury, death due to physical injury and mental injury caused by physical or certain criminal acts) sustained by all New Zealanders and visitors to New Zealand, regardless of the injured person’s employment, status or age. Cover also extends to New Zealand residents returning from overseas with an injury, provided they have not been out of the country for more than six months (some exceptions to the six month rule can apply where an individual has been overseas for work purposes).

Effect of cover
If an injury is covered under ACC there are two consequences:

  1. ACC will provide support in respect of the injury. The support may include treatment, ancillary services (such as transport and accommodation), rehabilitation, fair compensation (including weekly compensation for loss of earnings and lump sum payment when permanently impaired), and death benefits.
  2. There is no right for the injured person to sue anyone in respect of the injury, no matter how it was caused. There may still be adverse consequences arising from an accident, but these relate to injury that has been deemed to occur to society or other breaches of duty. For example there may be prosecutions under:

For more information about the ACC and its services, please visit the ACC website.

The Rise of Look Through Companies

In 2010, the Look-Through Company LTC was introduced to replace the former Loss Attributing Qualifying Company (‘LAQC’) and Qualifying Company (‘QC’).

What is it?
A LTC is similar to a limited liability company, however its income and losses are treated differently for tax purposes. The tax structure of an LTC allows the company to transfer income and expenditure to its shareholders directly. The shareholders of an LTC become liable for income tax on the company’s profits while also being able to offset the company losses against any other income.

Key Features of the LTC Regime
LTCs are governed by subpart HB of the Income Tax Act 2007 (‘the Act’). Some of the features and requirements for an LTC are:

Companies can elect to become an LTC, and existing LAQCs and QCs can elect to become an LTC without a tax consequence in the income years commencing 1 April 2011 and 1 April 2012. All shareholders of a company must elect for the LTC rules to apply in order for the conversion to be effective.

Some of the advantages of using an LTC as opposed to other business structures (including partnership, sole trading, or trust) are:

For advice on the best structure for your business please contact Louise Smith (09) 407 0175 or Graeme McLelland (09) 407 0179.


McLeods Lawyers is pleased to support Hospice Mid Northland and the valuable work they do in our local community. Hospice Mid Northland wants to get the word out about their exciting new fundraising initiative: maybe you can help? Hospice describes how it works below.

Farming Initiative to Support Hospice
We are very thrilled and fortunate to have two amazing volunteers leading this initiative, Bill King and Terry Nicolle who between them have decades of experience in the farming sector. The programme entails Bill and Terry identifying farmers who are happy to partner with Hospice to “grow” and graze livestock on our behalf. They will purchase the animals on our behalf; the animals are tagged as Hospice animals and are co-mingled with the farmers flock or herd. When the animals are slaughtered or on-sold the proceeds come to Hospice to enable us to continue to provide our free specialist palliative care service to our community. The Board approved the seed funding to kick-start the project but it is hoped that farmers will also donate additional animals. We are pleased that we have already had two steers donated and we have also received financial contributions to purchase additional animals. We will also be encouraging our supporters, members and community groups to “buy an animal” for Hospice. Working with the agricultural sector is not restricted to animals and grazing and we hope that in due time we may also be able to work with horticulturalists and vintners in our region. Our thanks go to all who have worked on this wonderful initiative and we look forward to many more innovative ideas to help us meet with confidence the future requirements and demands on Hospice Mid-Northland. Don’t hesitate to contact one of the Board or our Fundraising & Awareness Manager or General Manager if you would like more information, would like to help, or indeed would like to buy an animal. Phone (09) 407 7799 or email

Staff At McLeods Lawyers
2012 has been a year of change for us at McLeods Lawyers as we have welcomed several new staff members. We also have a Kerikeri High School student, Jackson Lee, helping us in the afternoons (and helping to even up the male to female ratio), Welcome Jackson.

Super Gold Card
McLeods Lawyers now offers 10% off all wills and powers of attorney to Super Gold Card holders.

Website and Facebook
If you haven’t checked out our website, it is worth having a look We are also on Facebook, and make an effort to regularly post links to articles and snippets that may be interesting to our clients. Please like us on Facebook to receive notifications of these links.

All information in this newsletter is to the best of the authors’ knowledge true and accurate. No liability is assumed by the authors, or publishers for any losses suffered by any person relying directly or indirectly upon this newsletter. It is recommended that clients should consult a senior representative of the firm before acting upon this information.

Winter 2012 Newsletter


Defamation claims have been a topic of interest lately with high profile figures such as Chris Cairns and Judith Collins taking legal action because they believe their reputations have been attacked.

What is Defamation?
Defamation in New Zealand is governed by the Defamation Act 1992, which is designed to protect a person’s reputation against unjustifiable attack. This requires a fine balance between the protection of reputation and the freedom of expression as contained in Section 14 of the New Zealand Bill of Rights Act 1990.

Proving Defamation
A defamatory statement may be either written or verbal. To be successful, the plaintiff must show she or he has been defamed by proving the following three elements:

Publication is a crucial aspect of this test. It must be proven that the defamatory statement was “published” to at least one person other than the plaintiff. If the statement was “published” to the plaintiff alone then the test for publication will fail. “Publication” of defamatory statements includes the making of verbal as well as written statements to third parties.

Defending Defamation
The four defences in a defamation case are:

Defamation and the Internet
The existence of the internet has created a further medium for publication. The recent English case of Chris Cairns against Lalit Modi was the first of its kind in England where a ‘tweet’ made on the social networking site Twitter was held to be defamation. The resulting award in damages was equal to approximately £3,750 per word for a 24 word publication. Although this case was decided in England, it provides a valuable lesson in terms of publications on social networking sites. Defamation actions are not common in New Zealand and require specialist lawyers with the appropriate experience.

Welcome to Newcomers

A big welcome to Fi Reeves who has joined us as assistant to Graeme, and is a qualified legal executive. Fi has wide experience in the courts, government departments and private practice. Judith Graham, who also works with Graeme McLelland is still on board with us and is available to those clients who know her well.
Also due to join us in August is lawyer Louise Smith, who, with her husband Scott and family has moved back to Kerikeri from Auckland, where Louise worked extensively in commercial law, finance, trusts, wills and property law.

Marriage and Name Changes

Spouses may assume a partner’s name immediately after the wedding without any formal procedure. It is not necessary to register a name change. Both the previous name and new name of a person will be recognised but using two names may cause practical problems.

When changing names on bank statements for example, a marriage certificate will be sufficient evidence to validate the change. Passports can remain unchanged and carry a previous name but any travel document (insurance, tickets) must be in the passport name.

However for those wanting to record a name change formally, an application can be made to the registrar of Births, Deaths and Marriages by making a statutory declaration and completing a name change form. If you were born in New Zealand, changing your name by this method will result in your birth certificate being amended to record the new name.

Provided there is no intention to deceive, a person may adopt a new name for any reason.

It is also important to ensure formal documents and records (land ownership, insurance policies, bank accounts, for example) show names correctly spelt, as discrepancies may cause confusion or delays if you wish to deal with those assets in circumstances where ID is required, or following a death. For advice or help if you want to formalise the use of a name you have used for some time, phone Sarah Jury 4070176 or email

Joint Tenants vs. Tenants in Common

In New Zealand, when purchasing a property with another purchaser you may own the property as joint tenants or tenants in common. Deciding which form of ownership to use depends on your personal circumstances. The differences between joint tenants and tenants in common are significant and the wrong choice may have unexpected consequences.

Joint Tenancy
Joint tenancies occur when two or more people (‘joint tenants’) own land or other assets (such as a car or bank account) together and their shares in the asset are undivided and undefined.

One important feature of a joint tenancy is the right of survivorship. This means when one of the joint tenants dies, their share in the property will transfer to the surviving joint tenant(s). The interest of the deceased owner in the property is not available for disposal under a will or under an intestacy.

Joint tenancy ownership is most commonly seen in purchases by spouses/partners who intend owning the property equally and passing their share to the survivor on death.

Tenants in Common
Tenancy in common allows for owners to hold a distinct share of an asset. There is no requirement that a tenancy in common must result in equal shares of ownership. The amount of a person’s interest in the property will most likely be recorded on the title, for example: “Mark Smith as to a 1/3 share and Jane Brown as to a 2/3 share”.
An advantage of owning property as a tenant in common is that the owners are able to dispose of their share in the property in accordance with the terms of their will. If a person does not have a will, their share in the property will be distributed in accordance with the provisions of the Administration Act 1969. It is important that owners have a valid will which clearly sets out how the asset is to be dealt with after their death.

A joint tenancy can be severed unilaterally to become a tenancy in common. This may be opportune in a bankruptcy of one of the joint tenants or the breakdown of a relationship. Where a relationship ends, it is often crucial that an existing joint tenancy is severed to prevent a share of the property being transferred to an ex-spouse if either spouse dies before resolution of relationship property division.

For couples wanting to buy a property together, or in the acquisition of assets by business partners, it is important to consider the effect each type of ownership will have on them. Relationship property and family protection implications on death are significant. We recommend a contracting out agreement under the Property (Relationships) Act 1976 or a property sharing agreement to set out more detailed terms and provisions regarding the ownership of the property.

All information in this newsletter is to the best of the authors’ knowledge true and accurate. No liability is assumed by the authors, or publishers for any losses suffered by any person relying directly or indirectly upon this newsletter. It is recommended that clients should consult a senior representative of the firm before acting upon this information.