Covid-19: Malloy Goodwin Harford is monitoring the Covid-19 pandemic and assessing the risk to both staff and clients in line with current Ministry of Health guidelines. We continue to provide legal services and do not anticipate any material disruption to our work with clients. We can address all client enquiries via e-mail and phone in the first instance....
From 1 July 2018, the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (“Act”) applies to Malloy Goodwin Harford and other New Zealand law firms. To date, this legislation has mainly affected banks and investment advisers. As from 1 July, it will apply to most New Zealand law firms including ours. As from 1 October this year it will apply to accountants, and as from 1 January next year it will apply to real estate agents. The principal purpose of the anti-money laundering legislation is to increase the likelihood of the detection and deterrence in New Zealand of money laundering and...
Recently enacted changes to the Commerce Act 1986 significantly extend the scope of what can be considered to be cartel conduct prohibited by the Commerce Act. Common, and often pro-competitive, commercial arrangements will be subject to greater scrutiny. This is particularly true of distribution arrangements and joint ventures. There are limited exceptions for certain collaborative activity and for certain provisions in vertical supply contracts. Previous proposals for criminalisation of cartel conduct were not ultimately adopted. However, the consequences of breach are still severe. They include potentially large pecuniary penalties, exposure to damages and the unenforceability of contracts. Core Prohibition The previous prohibition on price...
New Zealand business is sustained in large part by people getting into business together and sharing their expertise. We often advise clients on shareholder and joint venture agreements and the obligations that come with getting into business with other people. It doesn’t always go to plan and in Mike Pero’s case he found out that when it doesn’t you can’t ignore your obligations to your fellow shareholders and act in your own self-interest (in his case giving himself a healthy pay rise that the High Court has ruled he now has to pay back)....
The value of a customer's acknowledgement of terms and conditions at the start of a contract and the inclusion of unambiguous exclusion clauses in those terms and conditions have been highlighted in a recent case where a construction labour hire company was able to enforce a statutory demand for unpaid amounts. ...
A recent decision of the Supreme Court has confirmed that the duty of care owed by local bodies to building owners when inspecting residential buildings extends to mixed residential/commercial buildings. The Supreme Court case in Byron does not amount to a finding of negligence against the Auckland Council. However, the way is now open for building owners to claim and seek to prove negligence against Councils in 'leaky building' cases. The Supreme Court case The case related to Spencer on Byron, a high rise building on Auckland's North Shore containing hotel units and six penthouse apartments. Many owners of the hotel and penthouse units, along...
We are often asked to advise a Board or majority shareholder on arrangements to sponsor valued employees into acquiring a shareholding in a company. The specific reasons for employee shareholding arrangements can include succession planning, a reward for loyalty and the contribution of the employee to development of the business or as an alternative to more traditional forms of bonus remuneration. The plan is generally to incentivise the employee to help maximise company profitability and receive a potential bonus by dividend and potential capital growth for the shares held. However, if not structured correctly, the intended golden handcuff can end up...
Joint ventures are widely used in New Zealand business. The size of our country and constraints on access to capital mean that this type of collaboration is often essential for business expansion. A joint venture arrangement will typically involve each joint venture partner bringing their respective expertise and resources together for a common business purpose, often exploited through a new company owned by the joint venture partners. A recent decision of the Court of Appeal has highlighted the dangers for joint venture partners in expanding a joint venture business without final documentation or a considered eye for the future. The case...
Do family trusts still serve your best interests? The answer in most cases will continue to be a very definite "Yes". Many of us continue to want the flexibility a fully discretionary family trust provides. Our wish may be to manage the transfer between generations of wealth within a family using an ownership vehicle (the trust) which sees family wealth passing to the next generation in a sheltered manner. It may also be to quite lawfully shelter assets from the claims of future creditors, future relationship property claimants and other third parties. In years gone by income tax minimisation and death duty minimisation were major...
A decision of the High Court in I-Health Limited v iSoft NZ Limited has highlighted the care that is required in the drafting of earn out provisions and related liability limitations under sale and purchase agreements. Background I-Health and iSoft are both health information technology companies. In December 2003, I-Health and iSoft entered into a sale and purchase agreement under which iSoft agreed to purchase the business and assets of I-Health. The purchase price was to be not less than $1,475,000 and was subject to an earn out arrangement linked to software revenue made by the iSoft group from the sale of I-Health products...