Dispute Resolution Archives - Albany Legal

Why Trusts Remain Useful

Chris Hallowes — Fri, 14 Aug 2020 04:55:50 +0000

The new Trusts Act is coming into force in January 2021. It ushers in a new beginning for trust law and practice in New Zealand.

The introduction of the Trusts Act has resulted in a nationwide conversation on the actual purpose underlying Trusts and ultimately whether they are still worthwhile. We believe the answer is clearly YES. Whether a Trust is right for you and your family is the question worth exploring.

In one sense, the law introduced by the Trusts Act is not ‘new’ as the common law principles of trust law remain. In another sense however, the law is ‘new’ as after 10 years of reviews, submissions and debates, Parliament has endorsed the unique legal concept of Trusts and its underlying trust relationship Parliament was absolutely clear that trusts play an ‘extremely important part in the framework of our legal and financial system’ in New Zealand, and ‘they have a key role in all aspects of the country’s commercial and financial sectors as they are central to ensuring that assets and wealth can be handed down to the next generation’.

So what purpose do Trusts have in the modern era?
As legal instruments, Discretionary Trusts remain unsurpassed as a mechanism to hold, grow and secure investment assets and to provide benefit of those investments in a planned, flexible and sustained way to family members and other worthy recipients like charities over the long term (which can now be 125 years under the new Act).

Put simply, if properly established and managed, a Trust provides asset and wealth protection against creditors and predators.

A Trust can potentially provide protection for your assets from a claim by a creditor.

Trusts can also ensure that your children, and not their partners, keep their inheritance. They manage the risk of unwanted claims on your estate after death and provide complete confidentiality from the public.

Trusts also provide potential protection against future tax law changes, such as for example, if a wealth tax, a death or inheritance tax is introduced in New Zealand, then trusts may be exempt.

Is Trust worthwhile for me?
Everyone’s circumstances are different. Family trusts cost money to establish and there are generally ongoing annual legal and accounting fees. These costs must be weighed up against what risks you perceive to be applicable to you.

The following queries could be useful in determining this question:

Do you run a business that could face claims from creditors?
Is there a potential for a relationship property claim against your assets or your children’s assets?
Could predators come for your wealth?
Is intergenerational wealth management a concern for you and your family?

Setting up a Trust and managing it correctly can be a complicated process that requires expertise, if you’re interested in receiving advice on a Trust for you and your family please contact our Trust and Estate specialist, Chris Hallowes on 027 253 1980 or chris@albanylegal.co.nz.

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Oaths, Affirmations and Declarations during COVID-19

Chris Hallowes — Fri, 15 May 2020 04:30:07 +0000

Many important documents require an oath, affirmation or declaration to validate their authenticity, be used as evidence in Court, or to comply with legislation/rules surrounding their use. It is, under normal circumstances, integral that these oaths, affirmations and declarations are taken in person. With the requirements of COVID-19 Alert Levels – including physical distancing – the ‘normal’ approach is not possible.

Parliament therefore issued an Immediate Modification Order (IMO) under section 15 of the Epidemic Preparedness Act 2006. IMOs take the form of Orders in Council and essentially rewrite parts of the law where there is a statutory requirement or restriction that is impossible or impracticable to comply with during an epidemic. The IMO relevant to oaths, affirmations and declarations was the Epidemic Preparedness (Oaths and Declarations Act 1957) Immediate Modification Order 2020.

The purpose of this IMO was to temporarily amend the Oaths and Declarations Act 1957 which sets out the requirements for making oaths, affirmations and declarations. The amendment allows oaths, affirmations and declarations to be taken and witnessed remotely using audio-visual or audio links. Despite this fundamental change, the person taking the oath, affirmation or declaration must still ensure that the person making the oath, affirmation or declaration:

Is the person signing the document;
Has read and understood its contents and believes its contents to be true; and
That the exhibits attached to the document are those referred to in the oath, affirmation or declaration.

This IMO also allows entities that receive statutory declarations to authorise members of their staff to take statutory declarations instead of a lawyer, JP, Deputy Registrar in a Court or other person who would normally do it. This is due to the possible difficulty in finding someone to take statutory declarations as Court counter services are closed to the public and the temporary suspension of Justices of the Peace.

Note these changes made by the IMO are temporary; once the Epidemic Notice is lifted in New Zealand the law will go back to the position prior to COVID-19.

How can a person take an oath, affirmation or declaration remotely?
The best approach is to set up a meeting for the oath, affirmation or declaration via an audio-visual link such as Skype/Zoom/FaceTime/Messenger. With the audio-visual link it usually becomes possible for the person taking the oath, affirmation or declaration to ensure the identity of the person is established, that the right document is being looked at, that any attachments referred to are attached, and that the person understands it in its entirety.

Since this approach is not as secure as it would be in person, the person taking the oath needs to be satisfied that all usual requirements are satisfied. It’s important that the quality of the audio-visual link enables the oath, affirmation or declaration taker to clearly witness both the person making the oath, affirmation or declaration and the document with attachments (if any).

If the person making the oath, affirmation or declaration is unknown to the person taking it, it is essential they first check reliable photographic identification (normally driver’s licence or passport). It is also vital that both parties are reading the same document(s) and that each page being signed or initialled is clearly visible.

How should a written oath, affirmation or declaration be signed?
The person making the oath, affirmation or declaration should sign the document during the audio-visual or audio link.
The signed document then must be sent to the person taking the oath, affirmation or declaration as soon as possible after the audio-visual or audio link so that they can also sign it. This can be done electronically through scanning or photograph. At Alert Levels 1-3 this could also be done through post or courier. At Alert Level 4 the document can only be posted or couriered if it is an essential “good”.

Although not mandatory, it would be wise for the person taking the oath, affirmation or declaration to note on the document that it was taken by audio-visual link.

If audio-visual communication is not possible?
This IMO also allows the use of an audio-link such as a telephone to take oaths, affirmations or declarations. If this method is used however, precautionary measures are once again necessary to satisfy the usual requirements.

The person taking the oath, affirmation or declaration over the phone should:

Read out the document(s) in full;
Be fully informed about the contents of the oath, affirmation or declaration; and
Ensure that the person making the oath, affirmation or declaration is known to them or has some way of verifying their identity.

Final Notes
It is not necessary for the person taking the oath, affirmation or declaration to also sign a certificate setting out the circumstances in which the oath, affirmation or declaration was made. Nonetheless it might be a good idea to do so to give the entity receiving the oath, affirmation or declaration confidence that the requirements have been complied with.
The New Zealand Law Society has provided a template for lawyers showing what a certificate could look like as well as other guidance on:

https://www.lawsociety.org.nz/practice-resources/the-business-of-law/legal-practice/opinion-administration-of-oaths-and-declarations-in-circumstances-of-mandatory-self-isolation.

A lawyer has a duty to inform you up front of any costs associated with taking (witnessing) your oath, affirmation or declaration and to charge only a fair and reasonable fee.

If you are still finding it difficult to arrange for an oath, affirmation or statutory declaration you should talk to the entity you are providing the oath, affirmation or declaration too. Some flexibility has been given to some entities to do things a little differently during COVID-19 and your circumstances might be workable.

If you need advice or assistance in dealing with an oath, affirmation or declaration, then contact the Barter Law team.

This blog is published for general information purposes only and is not intended to constitute regulated services under the Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008. The blog posts should not be relied on as legal advice. If you require legal advice you should always contact a lawyer to provide you with specific legal advice on your situation.

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Property Settlements during COVID-19 Level 4 Lockdown

Chris Hallowes — Tue, 24 Mar 2020 20:57:55 +0000

The announcement made by the New Zealand Prime Minister on Monday 23 March to prepare to move to Alert Level 4 – Eliminate, by midnight Wednesday, has had far-reaching social, economic and legal ramifications. Not least of all in the area of conveyancing and what should occur for settlements that are scheduled for the period in which the country is at Alert Level 4.

The ADLS Standard Agreement for Sale and Purchase (10th edition) will be the most common contract in use. Clause 3.3 of that contract states that ‘Possession shall be given and taken on the settlement date’. The question for both vendors and purchasers is what is the effect of not being able to take/give possession due to the Alert Level 4?

It is estimated that there are 5,000 property transactions scheduled to take place in the estimated four week lock down period. Each of these transactions will have their own unique set of facts. However, bear in mind the legal impediment to the movement of people. The National State of Emergency issued on 25 March states that “Where you stay tonight is where YOU MUST stay from now on”. It is likely that this legal impediment to movement will mean that the settlement will have to be deferred.

However, what if the property is tenanted and the same tenants will remain after settlement?

This would mean that there is no movement of people required and the transaction could settle.

What happens if the property being sold is due to have new tenants after settlement?

This would require a movement of people so could not settle. There has also been amendments to the Residential Tenancies Act made on 23 March 2020, see post about these changes here Residential Tenancy Act COVID19 Amendments.

What happens if the property is vacant?

This may mean that the transaction could settle but has not been decided by a Court yet.

All these are valid questions and require legal analysis and advice catered to your particular situation.

If you need any advice about your property transaction, then contact either Rick or Wendy from our conveyancing team to get the right advice, first time.

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