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Postscript

Looking after your wellbeing

In this very hard year, it’s important that we all look after our mental health. The New Zealand Economics Foundation’s (NEF) Foresight Project on Mental Capital and Welbeing research report has created Five Ways to Wellbeing. NEF found that building five actions in to your day-to-day life is important for the wellbeing of individuals, families, communities and organisations.

  • Connect
  • Keep learning
  • Give
  • Be active, and
  • Take notice

To find out more, go here

Put Matariki 2022 into your calendar

Aotearoa/New Zealand’s first Matariki holiday will take place on Friday, 24 June 2022.

The actual day will differ each year depending on the appearance of Pleiades in the sky, although it has been decided Matariki will be celebrated on a Friday to make a long weekend for New Zealanders. In 2023, Matariki will be celebrated on Friday, 14 July.

The Pleiades are a cluster of stars that rise in midwinter and mark the start of the Māori New Year. Some iwi name this time of the year Puanga, after a bright star that is above and to the right of the Matariki constellation.

Stay safe this summer

After another torrid Covid year, we are all looking forward to a sunny (and healthy) summer break. Remember, if you’re boating, driving, bush walking, swimming or enjoying your backyard this summer, please stay safe, look out for others and enjoy relaxing in our beautiful country.

Merry Christmas and a Happy New Year

We wish you all a very Merry Christmas and a happy, safe and healthy 2022.

Meri Kirihimete me te Hape Nū la.

 

DISCLAIMER: All the information published in Fineprint 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 Fineprint may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2021.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650

 


Lease vs licence

Common contractual arrangements in commercial property

Choosing the premises from which to operate your business can be daunting; it is essential that you know you are entering into the right type of agreement to suit your intentions.

Leases and licences are common contractual arrangements. Although both are similar, there are crucial differences between them which can have significant implications for anyone who owns or occupies commercial premises. Knowing their differences, and when to use each, will help prevent any confusion, conflict or loss that may arise if you are not fully informed.

Possession or occupation?

The essential distinction between a lease and a licence is the type of rights they grant in relation to the property. A lease grants you exclusive possession of the property, but a licence only grants the right to occupy and use the land.

‘Exclusive possession’ in a lease situation means you can exercise control over the property and exclude all others from it, even the owner of the property, except where they have a legal right to enter the premises, for example to complete repairs or inspections. Occupation, however, is a right to use the property for a certain purpose and does not give you the right to exclude other people from it.

A lease typically grants much wider rights than a licence because it gives you control of the property subject to some exceptions. The obligations imposed on you under a lease may be extensive, but provided you are not in breach of the lease, possession of the property will stay with you. Under a licence, however, the opposite is the case. Control and possession of the property stays with the owner except where you are granted certain limited permissions.

This is the main area where difficulties can arise in defining leases and licences because the name of the document may not reflect its true nature. It is not just a case of what language is used, but rather the content of the agreement, and the rights and obligations it creates.

Certainty of term

The length of the arrangement is another important point of difference. Leases are typically long-term arrangements and must be for a fixed period and have certainty around the start and end date. Even a periodic lease has clear terms about how and when it can be ended.

A licence, however, can be for an uncertain period and, depending on the terms of the licence, can be cancelled by either party by giving written notice. The advantage of a lease is that it gives both parties more security because the length of the arrangement is certain, but this in turn means it offers less flexibility than a licence.

Changes of ownership

A lease is a legal interest in land and will survive changes in ownership if the owner sells the property. For example, if a commercial building has a tenant under a lease and is sold, the buyer buys the building with the tenant in place. The tenant can also assign the lease to another party with the owner’s consent through a deed of assignment without the new tenant having to enter a whole new lease.

A licence is different. It is a personal contract between the owner and licensee and generally cannot be transferred to another person. If the owner sells the property, the licence will come to an end.

Both have advantages

The crucial factor that distinguishes a lease from a licence is the scope of the rights, powers and obligations it grants or imposes. A lease generally gives you very wide powers to deal with the land and exclude others from it and anything that falls short of this is generally a licence.

Deciding whether to enter into a lease or licence will therefore depend on your intentions for the space. If you want long-term security and exclusive control over the property a lease will usually be preferable, but it comes with maintenance and other obligations and is generally a longer-term commitment.

A licence may be more suitable for short-term use where more flexibility is required or where the parties are still uncertain about their commitment to the arrangement. A licence is useful, for example, where you have a pop-up shop or use a space that is shared by multiple users.

The important thing is to get good legal advice before you sign on the dotted line so that you can be sure of the rights and obligations you are taking on, and the agreement fits your particular situation.


Over the fence

National Environmental Standards for Freshwater Regulations 2020: impacts on winter grazing

The National Environmental Standards for Freshwater Regulations 2020 came into force on 3 September 2020. The standards are designed to protect existing inland and coastal wetlands, improve poor practice intensive winter grazing of forage crops, restrict further agricultural intensification and limit the discharge of synthetic nitrogen fertiliser to land and require reporting of fertiliser use. Continue reading


Not a ‘gift’, there are employer obligations

Many New Zealand employers are scrambling to maintain solvency while balancing their employer obligations during the Covid-19 lockdown; thousands of businesses accepted the government’s Covid-19 12-week wage subsidy as a necessary lifeline. The subsidy was not, however, a gift. We take a closer look at employers’ obligations when accepting the wage subsidy.

Not all applications were equal

Obligations imposed on an employer are different depending on when the subsidy application, and the associated declaration, was submitted.

Continue reading



Time1Running a business? Think about using this downtime to update your business documents (employment agreements, policies etc.)

Have you found since the lockdown that you have now got a lot more time on your hands unexpectedly? We encourage you to use this extra time efficiently and to get around to some of those jobs that haven’t been pressing but are still important to complete.

Now is a good time to review and update your business documents, such as terms of trade, debt recovery procedures, employment agreements and workplace policies. It is vital to keep all business documents up to date, to ensure they reflect the recent legal developments. We can assist you with this (you do not need to leave your couch) and is a great way to plan ahead, for business beyond the lockdown period.

Our team would be happy to review your business documents and advise you of any that should be updated, during a free 15 minute online consultation. Feel free to get in contact with our team and we can talk you through specific recommendation to update your business documents. By having up to date business documents, this will assist your business to hit the ground running as soon as possible.


Enforceable undertakings

An alternative to prosecution under health and safety legislation

Enforceable undertakings were introduced in the Health and Safety at Work Act 2015 (HSWA) as an alternative to prosecution. An organisation that has breached its health and safety obligations, and is under investigation by WorkSafe, can enter into a binding agreement with WorkSafe to remedy their breaches, rather than going through prosecution and sentencing. In this article we discuss the features of this alternative and the potential benefits of taking this path.

enforceable

Enforceable undertakings are not an easier or lower cost alternative to prosecution, but there are other benefits to a business.

Continue reading


We’ve all seen the headlines about growing Chinese investment around the world and New Zealand is certainly no exception. Although you may already have been in business for years and have a great deal of experience, if you want to be truly successful with a Chinese counterparty then there are some key cultural differences which you should take on board. With that in mind we have set out some points to be aware of when you’re dealing with Chinese investors.

Key cultural differences

Many Asian cultures emphasise indirect communication, particularly if there is a problem. This can be frustrating for Westerners who would prefer just to ‘get it on the table’ and discuss. An email worded to state, ‘… we value the fact that we are equal partners …’ may be phrased that way because they are not feeling like an equal partner and are hoping the situation will improve. That subtlety may well be completely lost on the Western recipient who may be later surprised to find out that all is not as it seemed.
You can deal with a situation such as this by spending time asking questions of the other side and seeking to really understand what they are thinking. If you get a response which seems indirect then that’s a signal that you should follow up with other questions.

chinesebusiness

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Born to be mild…

Jpeg

Simon Brdanovic is all ready to head off to the Fielddays on his new Honda (thanks to Phil Empson at The Honda Shop). He is looking ‘spiffing’ in Gina’s swanni but he better watch out for Sam and Cat White’s hay bales! Thanks for setting up the display for us.

Look out tomorrow for the shearer’s morning tea!


The Supreme Court has today released a decision which will have major implications for many businesses that have traded with insolvent companies.

The Supreme Court has said that where an innocent party gives value at any time to a company that then failed, the innocent party will have a defence to a request of a liquidator for the repayment of sums paid to the innocent company. Previously the liquidator could claw back payments made to the innocent business for up to two years prior to the company going under.

This will be seen as a relief for many small businesses that can suffer significant harm when being asked to re-pay sums already received and spent by them.

However, it is necessary that the innocent business is acting in good faith and is not aware of the insolvency of the company – often this is a difficult hurdle to get over.

We will provide a further more detailed update once we have digested the decision in more detail.