2015 has been a busy year legally with everything from earthquake litigation keeping the courts busy to regulatory changes in employment, health and financial markets.
DLA Piper have reviewed the year with some insights into the developments and what might be expected in 2016 as well.
Among the key items reviewed:
> Changes to the ability of creditors to claim a Bankrupt’s superannuation interest – more clarity, but less consistency
In April 2015 the Court of Appeal held that KiwiSaver interests belonging to bankrupts do not vest in the Official Assignee in a manner that makes them available for the bankrupt’s creditors.[1]
This decision created both clarity and inconsistency as to when a bankrupt’s superannuation may be accessed by creditors.
The clarity comes from providing a firm statement that KiwiSaver interests are not accessible. The inconsistency comes from the fact that this is at odds with the position in relation to a number of other superannuation schemes. For example, as a general rule, private schemes cannot provide that a member’s interest will be forfeited to the scheme (and thereby protected) should that member become bankrupt.[2]
Then again, this inconsistency is nothing new – the position in relation to private schemes is at odds (and has been for a long time) with the inalienability of superannuation interests belonging to civil sector employees.[3]
The effect of this is that, currently, whether a bankrupt’s superannuation is safe from creditors will depend on what type of superannuation they have. While this is not new, the real impact of the recent Court of Appeal decision is that it is a major shift given the number of New Zealanders who are in KiwiSaver. An effort to obtain consistency regarding the position of superannuation schemes may well be a focus of Parliament moving forward.
[1] Trustees Executors Ltd v The Official Assignee [2015] NZCA 118. See: DLA Piper successful in appeal – KiwiSaver interests do not vest in the Official Assignee upon bankruptcy – 17 April 2015
New requirements for New Zealand incorporated companies
The new requirements for New Zealand incorporated companies are now in effect for both newly incorporated companies and existing companies.
Every time a new director is appointed to an existing company, an application is made to incorporate a new company or annual return is filed, the director’s date and place of birth must be provided to the Companies Office. It will not be possible to appoint a new director, complete an incorporation application or file an annual return if these are not provided. These details are confidential and are not being made public.
Also, the details of a company’s ultimate holding company (if it has one) must be provided to the Companies Office when filing that company’s annual return.
The deadline to comply with the requirement to have a New Zealand resident director (or director who is resident in Australia and who is also director of an Australian company) was 28 October 2015. The Companies Office is enforcing this by notifying non-compliant companies that they will be struck off if they do not comply by 17 December 2015. Potential removals are also being publicly advertised on the Companies Register. Non-compliance will result in that company’s immediate removal.
New requirements for New Zealand incorporated companies – 5 March 2015
New requirements for General Partners and Resident Directors – 11 September 2014
The new Health & Safety at Work Act 2015
The Health and Safety at Work Act 2015 (Act), is set to come into force on 4 April 2016 and is the biggest change in New Zealand’s health and safety regime in over 20 years.
The key changes for New Zealand businesses under the Act include new roles for officers, a person in control of a business or undertaking (PCBU) and workers, new duties for officers, the risk management approach and taking reasonably practicable steps, new duty-holder consultation obligations, new worker participation requirements and severely increased penalties.
Employers need to ensure they are prepared for the new Act coming into force in April next year.
Make sure your business can answer the questions below:
- Does your business understand the difference between a PCBU and an officer?
- Are the officers of your business aware of their duties under the new Act?
- Does your business have everything in place to meet the new duty-holder consultation obligations?
- Do worker participation requirements affect your business? And if yes, do you have everything in place to meet the worker participation requirements?
Final form H&S legislation – Health and Safety at Work Act – 30 September 2015
Health and Safety Reform Bill takes final shape – 30 July 2015
Employment Standards Bill will make sweeping changes
The Employment Standards Legislation Bill (Bill) is expected to come into force in April 2016. The Bill has the stated aim of promoting fairer and more productive workplaces for both employers and employees.
There are three noteworthy categories of changes proposed in the Bill.
The Bill will make amendments to the Parental Leave and Employment Protection Act 1987 that increases flexibility, expands eligibility for paid parental leave, changes the threshold test and introduces ‘keeping in touch days’ for the employee.
The Bill will prohibit unfair employment practices, including controversial ‘zero hour contracts’, and increase penalties for breach of employment standards.
It will also provide enhanced remedies (and penalties) where minimum entitlements are not provided to employees.
New Employment Standards Bill will make sweeping changes – 28 September 2015
Earthquake cases keep New Zealand courts busy
Commercial buildings in New Zealand are insured under what is called a Material Damage Policy. Since the Canterbury earthquakes, this policy has come under unprecedented scrutiny by the New Zealand Courts as a result of disputes arising from earthquake claims. In this article, we look at one of the most recent decisions.
Parkin v Vero Insurance NZ Ltd [2015] NZHC 1675
The insured’s house was near new and suffered damage in both the September 2010 earthquake and the February 2011 earthquake.
The policy contained a basis of settlement clause that paid for the costs actually incurred by the insured to repair the damaged portion of the house, using currently equivalent materials to a ‘when new’ condition. This is commonly referred to as ‘new for old’ cover. The dispute related to what all this meant in a practical sense. The Court held:
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While it was clear the insured had to incur repair costs before the insurer faced any liability under the policy, this did not equate to the insured having to spend his own money first.
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The insurer had not broken its duty of utmost good faith by not settling as the insured had requested.
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Repairing to the standard of ‘when new’ did not require the insurers to replace rather than repair every single damaged item. Where an item only had a functional purpose, so long as the repair or replacement restores that functional purpose to a ‘when new’ condition, the policy obligation was met. If there was an aesthetic purpose, the remedial process required is to restore the former aesthetics to a ‘when new’ quality and that might mean that in some situations, replacement was the only option.
Despite the 6th anniversary of the first earthquake occurring in September next year, there is no sign of earthquake related court proceedings being at an end.
Are Lladro porcelain pieces ‘ornaments’? – 16 October 2015
Proposed earthquake-prone buildings law change – 14 October 2015
Costs payable by EQC – 8 May 2015
Deprivation of use is not physical loss to the property – 18 March 2015
Tips and insights into the Financial Markets Conduct Act
The Financial Markets Conduct Act 2013 (FMCA) came into force on 1 December 2014 with most existing providers having a transition period taking them through to 1 December 2016.
Over the course of the last year, we’ve been providing tips and insights into FMCA and its workings to help clients get ready for the challenges and opportunities that the new regime provides. These tips have covered topics ranging from offers under employee share schemes and related party transactions, to advertising under FMCA and financial reporting (see below).
With just a year to go, there’s still a lot for many issuers to do ahead of the end of the transition period.
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