Newsletter Winter 2017 2017-06-02T11:26:42+00:00


Welcome to the team, Denise! 

Denise Hutt on Harley

Denise is the one waving!

We are delighted to welcome Denise Hutt, Legal Executive, to our Personal Planning and Business Solutions team.

Not one to sit still for long, Denise has a wide range of interests. Motorcycles, travel, bridge, cooking and photography—not to mention walking and going to the gym.

Born in Greymouth, Denise lived in Otira before moving to Lower Hutt as a child. Denise attended St Michael’s Primary School, then Sacred Heart College.

When Denise left school, she began her career at the Department of Social Welfare, now the Ministry of Social Development. There, she worked in all facets of the Ministry with the last 10 years involved in the Residential Care Loan Scheme.

Married with two adult children (who live overseas), Denise is enjoying her new challenge at ARL Lawyers focusing on Estate Administration matters.


Congratulations Ian – 30 years in Partnership

Last month Ian Avison celebrated 30 years as a partner at ARL Lawyers.

Ian began working at the firm in 1983 while still a Law student at Victoria University.  Then, his office was a desk in the hallway! But four years out from Law School, Ian was made a partner at the age of 27.

While the name of the firm has had several iterations since then, the practice has remained true to its value of pragmatic, cost-effective solutions.

Paul Logan and Ben Sheehan have both reached the 20-year milestone in partnership. So combined with Rebecca Dickie who has been a partner for almost 10 years, they have over 80 years in partnership and over 100 years’ experience in legal practice between them!

The staff got to enjoy a piece of this fantastic Khaki cake—made to Ian’s Grandma’s recipe!


Purchasing a property at Auction?  Here’s some helpful advice.

Property is often purchased and sold via auctions. However, buyers frequently under prepare for an auction and are caught out when the hammer falls.

When purchasing at auction, a buyer is making an offer unconditionally. This means that the highest bidder over the reserve (which is the lowest sum the seller agrees to sell it for), is making a binding cash offer and entering a binding agreement with the seller.

So, as a buyer, you need to have completed your due diligence investigations and asked all your key questions before the auction.

Talk to the agent

Before attending and bidding at an auction, you should obtain as much information as possible about the property by:

  • Talking to the listing agent
  • Reviewing the history of the land and the buildings via reports provided by the seller, the agent or purchased via a lawyer or the local council
  • Asking questions about the number of parties interested in bidding at auction and at what price they are registering their interest.

Some of the types of reports that you might need will be contained in the agent’s auction pack.

All buyers considering a bid should register their interest with the agent.

If a third party makes a pre-auction offer, the auction must be brought forward. In this case, you will need to be prepared to bid at the early auction and have funds available to pay the deposit. This must be paid on the auction day.

Review the auction terms and conditions

The agent should provide you with a copy of the auction terms and conditions of sale.

You should review these terms carefully to ensure that the proposed chattels list is correct and the settlement date is practically and financially achievable.

You should also be checking these terms to see whether any standard conditions have been deleted or varied, including disclaimers of warranties or information about a property. It is important that any changes are reviewed by your lawyer.

Get legal advice on the title

In becoming the buyer, as the successful bidder, you will have accepted the legal title to the property (the instrument that details the key legal interests and restrictions that apply to the land) and the auction terms and conditions of sale. So, it is extremely important that you seek advice on the title before attending an auction. Prudent buyers will also have taken advice on the auction terms and conditions of sale.

If in obtaining advice, you discover an issue with the property, agreement, or the title, you may raise the issue as part of pre-auction negotiations. In some instances, as a potential buyer, you may have negotiated variations with the seller prior to the auction, in the event your bid is successful.

Due diligence

A Land Information Memorandum (LIM) is a report prepared by the relevant Council which provides historical and current information relating to the property, land and any buildings. You are strongly advised to obtain a LIM report.

A LIM report enables you to find out whether the buildings and/or structures on the land which require consent, such as a dwelling, spa pool, garage or fireplace, have been approved by the local council. In addition, a LIM report may provide information on the zoning of the area and natural hazards.

Builder’s report and contamination testing

Engage a qualified builder to perform a pre-purchase inspection. The written report you receive will outline any significant building defects. A comprehensive builder’s report can be expected to include advice on fences, paths, retaining walls, foundations, insulation, ventilation, plumbing, drainage, structures and roofing materials.

Contamination tests which measure toxicity within a building and provide information on whether it is safe to work or live in, are becoming more common. High toxicity levels may result in health risks and time-consuming and costly decontamination processes.


As auctions are based on potential buyers making unconditional offers to the vendor, it is essential that any necessary finance is arranged prior to bidding at auction. You must be able to draw down the funds on the designated settlement date.


In summary, as a buyer, you should gather as much knowledge as possible on a property before bidding at an auction. Doing so will enable you to set a purchase price that you are comfortable bidding to. It will also help the bank and insurance brokers give you the promises and backing you need to bid.

Our team of expert property lawyers can offer you advice on the documentation and process involved in bidding at an auction. Call us on 04 5666 777 for sound, pragmatic advice.


Health and Safety at Work Act 2015 – Happy First Birthday

Prior to the enactment of the Health and Safety at Work Act (HSWA), between 40 and 60 people were killed in workplace accidents each year. According to Worksafe New Zealand, this number is more than three times the annual workplace deaths in the UK and double those in Australia. The HSWA seems to be having an effect. The deaths in the agriculture and construction industries dropped during 2016.

General responsibilities

Under the HSWA, Persons Conducting Business or Undertakings (PCBU) have a duty to ensure that, so far as reasonably practical, the workplace is without risks to the health and safety of any person. PCBU’s are usually business entities such as companies, but also includes sole traders, self-employed persons, contractors and certain volunteer organisations. The HSWA also places obligations on those who have been delegated responsibility for health and safety (Officers) and persons working at a workplace (Workers).

In general terms, a PCBU’s underlying obligation is to ensure that all reasonable measures have been taken to protect the health and safety of workers and other persons who are in the workplace. Officers (individuals who are in positions that allow them to exercise significant influence over the management of the business or undertaking) are responsible for exercising due diligence to ensure the PCBU complies with its duties. Workers must take care of themselves and ensure they do not affect the safety of others and comply with all reasonable directions, policies and procedures.


A Worker who commits an offence of reckless conduct will be liable to pay a maximum fine of $300,000 or serve a maximum term of imprisonment of five years. For the same offence, a PCBU or an Officer may pay a maximum fine of $600,000 or serve a maximum term of imprisonment of five years.

If a Worker is convicted of failing to comply with a duty that exposes an individual to the risk of death, serious injury or illness, they will be liable to pay a maximum fine of $150,000. In the same instance, a PCBU or an Officer will be liable to pay a maximum fine of $300,000.

If a Worker fails to comply with a duty (that does not also expose an individual to a risk of death or serious injury) he or she will be liable to pay a maximum fine of $50,000. In the same instance, a PCBU or Officer will be liable to pay a maximum fine of $100,000.

Decisions by the Courts

The press followed the prosecution of Pike River Coal Limited (PRCL) closely and many considered the sentences to be lenient. In that matter, PRCL was convicted under the old Act and therefore faced lesser penalties than those set out in the HSWA. The Department of Labour brought three charges against PRCL (each carrying a maximum of a fine under the old Act of $250,000) and it pleaded guilty to all three charges. In its judgment, the Greymouth District Court fined PRCL $46,800 in total for unsafe work practices.

Although there have been no convictions under the HWSA yet (incidents currently before the Courts occurred prior to 4 April 2016), recent decisions by the Courts under the old Act have suggested that a harder line (than in PRCL) seems to have been taken since the introduction of the HSWA.

In November 2016, the Court was asked to determine penalties relating to an incident that involved an employee who was killed when a substance was being transferred from a transport tank to another tank under pressure. The company involved was charged under the old Act and pleaded guilty. The penalties levied on the defendant in this matter were more severe than those in the PRCL case. Here, the company was ordered to pay $140,319.80 in reparation to the victim’s family. Reparation was ordered instead of fines so that the affected persons were compensated as the company was in liquidation and did not have the resources to pay both reparation and fines. However, the Court found that an appropriate fine, in this case, would have been $73,800.

If New Zealand Courts adopt an Australian approach, we can expect fines and penalties such as these:

  1. In a case in which a gap was not adequately covered by an unsecured plank of wood causing a death, the company involved was fined $425,000; and
  2. In the same case, the director of the company was held personally liable and fined $85,500.

Despite there being no decisions by the Courts under the HSWA, New Zealand businesses, their owners and key staff will face higher penalties in future.


Enduring Powers of Attorney – Recent Changes

Amendments to the Protection of Personal and Property Rights Act 1988 introduced plain language forms of Enduring Powers of Attorney (EPA) and standard explanation documents outlining the effects of appointing an attorney. These changes came into effect on 16 March 2017.

EPAs defined

An EPA is a legal document that allows an individual (called the Donor) to appoint another person or persons (called the Attorney(s)) to take care of their personal care and welfare and/or property if the Donor loses the ability to do so themselves. This appointment does not prevent the Donor from managing their own affairs.

In contrast, a General Power of Attorney is valid only when the Donor has the legal capacity to instruct the Attorney(s).


An EPA for property allows the Attorney(s) to deal with the Donor’s property: for example, shares, land and money. The Donor may wish the EPA to take effect once signed and continue to apply if they are mentally incapable, or only to take effect if they become mentally incapable.

Personal care and welfare

This EPA allows an Attorney (only one Attorney may be appointed at any one time in respect of personal care and welfare) to make decisions about the Donor’s personal care and welfare if they become mentally incapable. This power is subject to various safeguards and extends to decisions on any medical treatment required and whether the Donor attends hospital or becomes a resident in a residential care facility.

Under this EPA, the Attorney’s powers can be general or specific depending on the Donor’s wishes and end when the Donor dies.

Changes made

The key change to the law is that instead of instructing a lawyer to create the EPA document itself, there are now forms available for both types of EPAs. The EPA forms can be downloaded, completed and witnessed by a lawyer, qualified legal executive or representative of a trustee corporation. However, it is still essential to obtain legal advice before signing the form.

The forms provide options available to the Donor and outline the responsibilities of the Attorney(s).

Further changes under the new rules are summarised below:

If two people appoint each other as Attorney, the same person can witness the respective Donor’s signature where there is no more than a negligible risk of a conflict of interest. Witnesses must ensure that the Donor understands the nature of the EPA, the potential risks and consequences and the Donor does not act under undue pressure or duress.  Witnesses can also use the standard explanation to discuss the implications and effects to the Donor of the EPA.

  • Attorneys must consult other appointed Attorneys (not including successor Attorneys) when exercising their powers.
  • A medical certificate is required to determine whether the Donor is mentally incapable. Under the old requirements, medical certificates were to be prepared in a prescribed form under regulations. However, some medical practitioners used their own form of medical certificates resulting in non-compliance. From 16 March 2017, medical practitioners can use their own form of medical certificates provided information from the relevant regulations is included. Previously issued certificates are still valid and do not need to be replaced – but can be if desired.

Transition provisions

Any EPAs executed by the Donor and Attorney under the old provisions remain valid. However, EPAs signed by the Donor on or prior to 16 March 2017 and not by the Attorney will need to be re-executed under the new provisions.

If an EPA signed after March 2017 revokes an earlier EPA where the powers of the Attorney are the same but the Attorneys appointed are different under each EPA, notice must be given to the previously appointed Attorney before the new EPA can take effect. Notice may be given by the Donor’s lawyer or an Attorney under the new EPA if the Donor is mentally incapable.


These changes are driven to simplify the process and reduce time and money invested in obtaining an EPA. The forms, standard explanations and frequently asked questions are available on the Government’s SuperSeniors website

Please contact us if you would like more information about Enduring Power of Attorneys. Our Personal Planning and Business Solutions team can offer you expert advice.


Default Interest

Default interest ratesDefault interest is a higher interest rate which is payable if a party to an agreement fails to fulfil an obligation to the other party. Typically, commercial arrangements, settlements and most loan agreements contain default interest clauses.

Default interest clauses are often seen in the standard terms of a loan agreement. The ordinary interest rate in a loan agreement might be 6.24% per annum. If the borrower was to miss a repayment, the agreement might require that the borrower pay a higher interest rate of, say, 11.24% on the sum not paid.

Default interest must be set at a reasonable commercial rate, which constitutes a genuine pre-estimate of loss to the innocent party in the event of default. To determine a reasonable commercial rate, consideration is given to the nature of the business, the industry, the economic climate and interest rates charged by major lenders such as banks.

Default interest cannot, by law, be used as a tool to penalise a defaulting party. The term ‘penalty’ applies to punitive default interest rate clauses within a contract. Essentially, this is where a contract is designed to make the consequences of a breach so daunting that a debtor will not default. Default interest clauses which constitute a penalty are unenforceable, even where parties agree to such a clause at the outset of the agreement.