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📢 Supreme Court Decision: Fiduciary Duties and Parent-Child Relationships

House, Kids, Media, News, Online, Property, Relationships
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The Supreme Court recently issued its much-anticipated ruling in A, B and C v D and E Limited as Trustees of the Z Trust known as the Alphabet case. It concerns the extent of fiduciary duties owed by a parent to an adult child. ⚖️

The case involves a father, who transferred most of his assets to a trust during his lifetime, leaving his adult children without any entitlement to those assets. The children argued that due to past abuse they suffered at their father’s hands, including physical, emotional abuse and sexual abuse, their father owed them fiduciary duties that extended into adulthood. They believed his actions in transferring assets breached those duties, and the assets should revert to his estate to satisfy their Family Protection Act claims to be provided for from his estate.

While the Court agreed that fiduciary duties exist between a parent and minor child, it ruled that those duties generally end once the child reaches adulthood or the caregiving responsibility ends. The Court rejected the notion that such duties continued into adulthood, despite the children’s vulnerability due to the abuse they suffered during childhood. Importantly, the Court noted that imposing fiduciary duties in this case would create legal uncertainty and “reverse engineer” a remedy for past wrongdoing.

The Court also ruled against treating the trust assets as part of the father’s estate. However, it acknowledged the need for legal reform in this area and pointed to the Law Commission’s 2022 proposal to allow courts to unwind property transactions that intentionally defeat claims under succession law.

While the Court was sympathetic to the appellants, it ultimately found that the law could not support their claim in this case. The ruling highlights the need for further reform in this area of law, which the Law Commission’s proposals may address in the future.

Kerry Bowler, Solicitor Kerry Bowler

Ensuring Animal Welfare This Summer

Animals, House, Media, News
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As the summer sun blazes, it’s a timely reminder to step up and meet our animal welfare responsibilities, whether you’re a dedicated farmer or a devoted pet owner. The Ministry for Primary Industries (MPI) Codes of Welfare provide the essential roadmap, setting minimum standards for animal care and offering best practices to help you go above and beyond.

Summer brings unique challenges for animals, and heat stress is a major concern. For pets, never leave them in cars, even for a short time—internal temperatures skyrocket, creating a life-threatening situation. Adequate ventilation and shade are equally crucial indoors to keep your furry friends comfortable.

For farmers, the stakes are high, especially for dairy cows. According to DairyNZ, cows thrive in temperatures between 4-20°C. Above this, they begin to experience heat stress, exacerbated by the energy-intensive process of digesting food and producing milk. As temperatures rise, they absorb more heat from their surroundings, making it harder to maintain their body weight and productivity.

Combatting heat stress means getting strategic. Ensure your grazing plan allows cows access to shade, such as tree cover, during the hottest parts of the day. Keep plenty of fresh, clean water available and adjust feeding practices to help them stay cool and maintain their condition.

This summer, let’s prioritise our animals’ comfort and well-being. To ensure you are on the right track, dive into the Codes of Welfare on MPI’s website. And if you are after expert advice tailored to your needs, our friendly team at Edmonds Judd is just a call away. Let’s make this summer safe and stress-free for all!

 

Fiona Jack

Fallen in love with a beach house over the holidays? Going to AirBnB it? Rent it out for a fixed term? Slow down …

House
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If you’re buying a beach house and planning to rent it out or Airbnb it when you’re not using it, there are some things you might want to consider:

 

  1. If you are going to rent the property out – make sure that it complies with the healthy homes standards. If not, consider how much it might cost you to make it compliant.
  2. If you are going to rent it out with Airbnb, you don’t have to comply with the health homes standards.
  3. Either way, you might want to consider how difficult it might be to manage the property if you live a couple of hours drive away from the property. Think damage, parties, meth use or production, and cleaning up at the end of each stay.
  4. Consider additional costs for operating an Airbnb. Some councils increase rates for temporary accommodation arrangements like Airbnb.
  5. You will need to make sure that you obtain insurance that covers you if your Airbnb or rental tenant damage the property.
  6. Again, get yourself some tax advice.
  7. Finally, if you are renting, make sure you know your obligations as a landlord and how you can go about legally ending the tenancy.

 

We’re open again from 6th January to help you with your property purchases and conveyancing needs. We can also help you with ownership structures, negotiating property sharing agreements, succession planning, and any disputes that might arise.

 

Joanne Dickson

Fallen in love with a beach house over the holidays? Going to purchase it with friends or family? Slow down …

House, Latest news, Media
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If you’re buying a beach house with friends or family, things can go brilliantly well. But sometimes things can go very badly! Protect yourself and those close relationships by taking these points into consideration:

 

  1. Think carefully about the ownership structure. Are you all going to own the property in your personal names? Is anyone in business and needing to protect their assets – their share of the property could be vulnerable to a claim from creditors, so you might want to consider using a trust? What if the worst happens and one of your co-owners dies – how will you feel about their children inheriting their share of the house? Is it going to be held in a partnership?
  2. Enter a property sharing agreement. If things don’t go according to plan, it is useful to have a contract that clearly sets out what is to happen if you don’t want to co-own that house anymore. This might be because you are no longer getting along, or you need to get your money back out of the house, or you’ve broken up with your significant other and need to sort out relationship property issues, or any number of other reasons. The property sharing agreement should also include when/how the co-owners can use the property, whether their friends or family can use the property, and how the expenses relating to the property are to be shared and paid.
  3. Get tax advice. Get along to your accountant, there could be some unexpected tax complications.

 

 

We’re open again from 6th January to help you with your property purchases and conveyancing needs. We can also help you with ownership structures, negotiating property sharing agreements, succession planning, and any disputes that might arise.

 

Wishing you all the best for the Summer holidays.

Joanne Dickson

Fallen for a beach house this holiday season? Ready to “buy now”? Take a moment to pause…

House, Kids, Latest news
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If you think you might succumb to temptation and buy a holiday house at your favourite beach this holiday season, here’s some points to consider when entering a sale and purchase agreement.

 

Your best option is to talk to a lawyer before you enter a contract to buy that beach bach. But, they might be on holiday too. So, if you can’t get to your lawyer, make sure your sale and purchase agreement has some conditions in there to offer you a level of protection. There are the usual LIM, building inspection, and finance conditions. But, you might want to also consider having these conditions too:

 

  1. Due diligence condition: this condition allows you to do some investigations before the contract becomes unconditional. If the property doesn’t stack up, you can cancel the contract, usually without providing a reason. This clause can potentially save you thousands of dollars!
  2. Subject to solicitor’s approval condition: this condition can be sued to cancel the contract on the grounds of conveyancing aspects of the purchase. So, not as broad a protection as the due diligence clause, but still a “good to have”.
  3. Insurance condition: given the changing nature of insurance in New Zealand and the impact that natural disasters can have, it is worth adding a condition that provides you are able to obtain insurance for the property.

 

Don’t get caught up in the hype. There’s always “someone else” interested in the same property. Take your time and make sure it is the right purchase for you.

 

Finally, make sure you get some accounting advice, there could be some unexpected tax complications.

 

We’re open again from 6th January to help you with your property purchases and conveyancing needs. We can also help you with ownership structures, negotiating property sharing agreements, succession planning, and any disputes that might arise

 

Wishing you all the best for the Summer holidays.

Joanne Dickson

Parental Leave: What to Know When You’re Expecting

House, Kids, Relationships
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Meet Luke and Sally. They’ve been together for about a year, and now they have some exciting news—Sally is pregnant with their first baby! Amid the joy, Sally wants to find out what her pregnancy means for her job and what leave she can take once the baby arrives.

Pregnancy Rights at Work

First things first: the law protects pregnant employees. Under the Human Rights Act, it’s illegal for anyone to treat Sally unfairly because of her pregnancy. In fact, employers can (and often do) offer extra support, like flexible work hours, to make things easier for expecting mothers.

Understanding Parental Leave

Sally is planning to be her child’s main caregiver, so she looks into her parental leave options under the Parental Leave and Employment Protection Act (let’s call it the Parental Leave Act for short).

The Parental Leave Act defines a primary carer as the biological mother (or another person, like a partner, in certain situations). If you’re the primary carer, you may be entitled to:

  • Unpaid parental leave from your employer, and
  • Paid parental leave payments, which are handled through Inland Revenue.

How Long Has Sally Been at Her Job?

What Sally qualifies for depends on how long she’s worked for her employer and how many hours she’s worked each week. Let’s break it down:

  1. 6-Month Test:
    If Sally has worked for her employer for at least an average of 10 hours a week in the 6 months before her baby’s due date, she qualifies for:

    • Up to 26 weeks of unpaid leave, and
    • Up to 26 weeks of parental leave payments.
  2. 12-Month Test:
    If Sally has worked for at least 10 hours a week in the 12 months before her baby’s due date, she’s eligible for:

    • Up to 26 weeks of paid parental leave, and
    • Extended unpaid leave of up to 52 weeks total.

Good news for Sally—she meets the 12-month test, so she’s entitled to the full benefits.

What About Luke?

Sally and Luke also have the option to share parental leave. If they decide Luke will be the primary carer at any point, he can take over Sally’s entitlements, but this means Sally would no longer have primary carer benefits during that time.

If Luke doesn’t take over as the primary carer, he can still apply for partner’s leave:

  • 1 week if he’s worked 10+ hours weekly for the last 6 months, or
  • 2 weeks if he’s worked 10+ hours weekly for the last 12 months.

What Does Sally Need to Do?

To take parental leave, Sally must give her employer at least 3 months’ notice before her due date. She’ll also need to include a certificate from her midwife confirming her pregnancy and due date.

Need Help?

Parental leave laws can seem complicated, but knowing your rights can make the process smoother. If you’re unsure about your entitlements or how parental leave might affect your job, we’re here to help—just reach out!

 

Kristin O’Toole

 

Wait! Before you sign that pre-nup! Step 3 – Advice

House, Kids, Property, Relationships, Uncategorized
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In this article we look more closely at Step 3 – Advice.

 

Once your lawyer has the details of all property owned by each of you they can assess what your rights would be if that property were divided under the RPA, and provide you with advice on how the agreement affects your property rights and the implications for you if property were divided under the agreement.

 

Why do I need advice on rights under the RPA if it’s just 50/50 and I’m contracting out?

This is where the law jumps in and says “woah there, partner! There’s a lot more to it (131 pages to be precise), so you should definitely get legal advice to check it’s what you want first”.

 

It is important that you fully understand your current property rights under the RPA before agreeing to change or give up those rights.  The starting point for under the RPA is that relationship property will generally be divided equally between partners in a qualifying relationship.  However, this is just a presumption, not a rule set in stone. There are numerous exceptions and adjustments within the RPA that can alter how property is divided based on the specific circumstances of your relationship.  Even the most experienced relationship property lawyers can find the RPA complex. That’s why seeking legal advice is essential before making any decision to contract out of the RPA.

 

Great, now you’ve had advice and know what your actual property rights are under the RPA, let’s compare that to your position under the contracting out agreement.

Even if you’re planning on entering into a contracting out agreement with the intention of maintaining a 50/50 split, it’s important to realise that the implications could be far-reaching.  Property rights, financial arrangements, estate planning, and even third-party property rights (such as those held in trusts or companies) can all be affected.  The agreement might impact more than you expected.  (*Hot tip* now is a good time to consider whether you should create or update your will as it works hand-in-hand with your contracting out agreement)

Your lawyer will be able to assess your specific situation and help you understand how the contracting out agreement compares to your rights under the RPA. They can guide you through the various consequences and ensure you’re fully informed before agreeing to anything.

 

But wait!!! It’s not enough just to receive legal advice—you need to understand it. Ensure your lawyer explains the details and feel free to ask lots of questions, we love to know you are thinking about how this all applies to you.

 

If you’re satisfied with the advice and understand the implications, it’s time to book an appointment with your lawyer to sign that contracting out agreement. This step is crucial to ensure your rights are protected and your intentions are clearly outlined.

Kerry Bowler, SolicitorKerry Bowler, solicitor

Neighbourhood subdivisions

House, Property
0

What is going up over the fence?

As urban land becomes more expensive, landowners and developers are constantly looking for ways to get the most out of their patch of dirt. Adding to the equation, a housing shortage across the country has led to increasing land development and subdivision to create additional dwellings. More recently, there has been a move to more compact multiple unit developments in many neighbourhoods.

 

Types of developments

Multiple unit developments have become popular with Kāinga Ora and other government or charitable agencies as they can build multiple dwellings onto a section that in the past may have been limited to a single dwelling.

Whether these types of developments on your neighbour’s property are being built for social housing or privately, you may have concerns about the effect they may have on your property.

 

What about my view?

Strictly speaking, no one has a legal right to a view. If you have concerns about a potential development at the property next door, you should first check the title of that property. If it is subject to any restrictive covenants that prevent certain development or subdivision, the landowner with the right to enforce the covenant could potentially put a stop to the prohibited developments. Often this will be you as the neighbouring property owner, otherwise if the covenant is ‘in gross’ it is enforceable by anyone.

Falling short of that, there may be restrictions in a covenant meaning that any new dwelling should comply with specific design specifications or building height restrictions that protect certain views or ‘view shafts.’ This may ease concerns knowing the new buildings next door should not affect your property too much.

 

No covenants, no choice?

Where there are no covenants in place that restrict the developer’s use of the land, the developer is bound solely by the relevant district plan and the Resource Management Act (RMA). The district plan sets out the local authority’s rules and restrictions for land use and development, and any application to develop a property is determined based on its compliance with the relevant district plan.

 

Consent

Where a development next door looks as though it may affect you, the developer may ask you to sign a consent. This will be either in preparation for their submission to the relevant local authority or may be a requirement set by the local authority following their application.

In either case, you do not have to sign the consent if you are unhappy with the development as it is presented. There may be a particular aspect of the design or location of the new dwellings that you don’t like; sometimes neighbours can negotiate amendments to the developer’s plan in consideration for their consent. Other times, you may simply not want it to proceed.

It is important to understand that not consenting to the developer’s request does not automatically mean that the development won’t go ahead.

 

Notification

If you are a potentially affected neighbour and you have not approved the application, the developer can request that the local authority notify the potentially affected parties of their application. At this point, you would be invited to submit your objections to the local authority for it to finally determine whether the development can take place.

In other circumstances, the relevant local authority will require that the developer notify affected parties as part of their application process. You can view the relevant district plan on your local authority’s website to determine if the development next door is compliant with the various rules relating to land and new housing.

In some circumstances, the proposed development will be wholly in compliance with the district plan and have no effect on your property. Where that is the case, you may not have any grounds for an objection or even be required to be notified of the development making it difficult to raise any objection.

 

RMA review

At present, the RMA is under review which is likely to result in a significant overhaul to the legislation governing land use and subdivision. Time will tell as to the effect of these changes on the rights of neighbours regarding subdivision and developments over the fence.

If you are approached by a neighbour about their development and need help to find out more about what they can do or what you can do to stop it, please don’t hesitate to contact us.

 

 

DISCLAIMER: All the information published in Property Speaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Property Speaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650

Wait! Before you sign that pre-nup!

Estate, House, Property, Relationships
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Three key steps before signing

There are many reasons for couples to contract out of the equal sharing provisions of the Relationship Property Act (RPA).

You and your partner are off to have the lawyer draw up a quick document and sign it.  But the law says, “Woah there, partner! There’s a lot more to it (131 pages to be precise!), you should definitely get legal advice to check it’s what you want first.”

The RPA states that your contracting out agreement is void unless before you sign, you receive advice from an independent lawyer on the effects and implications the agreement has on your property rights under the RPA.

There are three key steps you must take before signing a contracting out agreement for it to be valid:

  1. Independent lawyers: You must each have your own independent lawyer. Generally, this means the lawyer advising you on contracting out should not have previously acted for your partner.
  2. Disclosure: Through lawyers you and your partner exchange statements showing balances and values of all assets and liabilities. If significant property is not disclosed there is a risk that a court could overturn the agreement.
  3. Advice: Once your lawyer has the details of all property owned by each of you, they can assess what your rights would be if that property were divided under the RPA. They can then provide you with advice on how the agreement affects your property rights and the implications for you if property was divided under the agreement.

This article is the first in a series of four by litigation solicitor, Kerry Bowler.

 

 

Kerry Bowler, solicitor

Over the fence

House, Property, Rural
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Service tenancies on the farm

Arrangements where an employer provides housing accommodation to their employees, such as where a farm worker who lives on the farm, are known as ‘service tenancies.’

A service tenancy is governed by the Residential Tenancies Act 1986; it must be recorded with a written agreement. Regardless of whether your tenant pays rent for the property, it is still considered a service tenancy. A tenancy agreement may be incorporated into an employment agreement, however it is beneficial if they are two separate documents.

The Act sets out the rights and responsibilities for service tenancies – for both landlords and tenants. As a landlord you must provide the property in a reasonable state of cleanliness, comply with healthy homes standards, smoke alarm requirements, and any health and safety obligations. Your tenants must pay the rent when due, keep the property reasonably clean and have the right of quiet enjoyment.

A notable difference between service tenancy agreements and other tenancy arrangements is the notice period required to end the service tenancy. If you are terminating a worker’s employment, or your employee has decided to leave, both parties must give each other at least 14 days’ notice of the intention to end the tenancy.

In situations where the employment has ended you may give your tenant less than 14 days’ notice if you believe substantial damage will be done to the property if they continue living in the property, or you need the accommodation for a new employee starting in less than 14 days and no other accommodation is available.

 

Checking terms of engagement regarding liability

In farming there are often multiple parties involved in the overall enterprise. In the seed industry, for example, there is often the supplier, grower and cleaner.

The terms of engagement is a legally binding agreement that sets out the rights and obligations of each party in the overall structure. It is important to understand the terms you have agreed to particularly regarding liability so that you know if/when you could be liable for the seed and any damage caused to it.

The terms of engagement can differ depending on the structure of the arrangement. Whether your land is leased by a business to grow seed or whether you buy and grow the seed yourself can alter the rights and obligations. Different parties are liable for the seed from the time it is planted, through to harvesting and cleaning. For example, if the seed is damaged during the cleaning process it is important to know whether you are still liable or whether the seed cleaning company, if outsourced, has assumed liability for the damage.

Understanding your liability under the terms of engagement and ensuring that you have the appropriate cover in place is important. Who is liable, and what rights and obligations are owed differ depending on what process is followed.

 

 

Farm lease coming to an end – what’s required?

Under a farm lease the lessee commonly pays the farm owner (lessor) to run an independent farming operation on the leased land. Such a lease often gives the lessee access to the land, building and other infrastructure on the property or portion of the property.

Although this arrangement is mutually beneficial to both parties, it is not a shared responsibility. Your lessee is responsible for maintaining the land in accordance with the terms and conditions of the lease.

The duration of the farm lease should be included in the lease document. There are also prescribed obligations to comply with when the lease expires. Your lessee often has to ensure that, at the end of the lease, the land is returned in an acceptable state as agreed to in the lease terms, and is also required to remove alterations or additional fixtures they may have installed, and to destock the land.

If your lessee does not comply with these lease terms, they may have to pay the costs and expenses associated with removing fixtures.

 

If you would like some guidance on any of these topics in Over the fence, please contact us. We are here to help.

 

 

 

 

DISCLAIMER: All the information published in Rural eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Rural eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650