Mortlock McCormack Law Newsletter Issue 12

MML NEWS | July 2011mml newsMORTLOCK MCCORMACK LAW CLIENT NEWSLETTER ISSUE 12 JULY 2011EDITORIALAs we settle into the winter months anddespite all of the chaos of February and June,the year continues to progress at ‘light speed’and one wonders where the days go.General Manager, Jan Crooks retired in lateMay and she began a three month internationaljourney with husband Kevin. Our fi nalafternoon with Jan, her extended family, andthe staff and families of Mortlock McCormackLaw was a great way to bid farewell.In the same breath, we welcomed herreplacement, Shayne Te Aika. Previouslyworking in the Defence arena, Shayne bringson an extensive management and leadershipportfolio to our fi rm. Additionally, VanessaAbsalom-Mueller joins us in her fi rst year asa practising solicitor.Across June we farewelled Jason Ray and inJuly we farewell Simon Ford who has beenassociated with Simon Mortlock Partnersand Mortlock McCormack Law for near oneight and a half years. Simon is embarkingon an exciting new journey in the businessenvironment. We wish both Jason andSimon success in these opportunities.Now fully operational in our Clarence Streetoffi ce, every day is abundant with newopportunity. We hope you fi nd some worthypoints of interest across our July Newsletter.INSIDE THIS EDITIONMediation 1SnippetsChanges to the Holidays Act 2Email Disclaimers 2Sleeping on the Job 2Earthquake Insurance Issues? 3Pre-1900 Exotic Forests 4Consumer Law Update 4MediationMediation and other forms ofalternative dispute resolution arebecoming increasingly part of ourjustice system enabling partiesto settle disputes co-operativelyoutside the Court arena.Mediation is a process in which anindependent mediator works with theparties in a dispute to help them define whatare the real issues, then explore optionsfor a mutually acceptable resolution. Whatis important in the process is that it is theparties who negotiate with each other anddecide what they agree on, not a third partysuch as a judge or an arbitrator where therecan only be a winner and a loser.What is also implicit in the process isthat the negotiations are, by agreement atthe beginning, treated as being withoutprejudice, ie. confidential so that anythingsaid at the mediation cannot be used later ifagreement is not reached.One of our Partners, Hugh Cottrell is atrained and qualified mediator and hasbeen acting in this role in the Matrimonial/Family Law arena in Christchurch for thepast two years and has completed over100 mediations. He is very enthusiasticabout the process in that, provided theparties come to the mediation with an openmind, prepared to listen to the argumentsof the other party and prepared to considera compromise, agreement can be reachedspeedily as to either the substantive issuewhich is in dispute, or as to a constructiveway forward.With a success rate of around 90%, Hughcomments that it is a very rewarding processfor the parties for the following reasons:• Minimal formality.• Can be set up at short notice.• No need to involve Lawyers.• Is comparatively cheap and cost effective.• Is constructive in that in a confidentialenvironment. It empowers people toresolve their own disputes.• The parties invariably come awayfrom a mediation in a positive frame ofmind, both feeling that there has been asatisfactory outcome.The mediation process lends itself to allmanner of disputes, large or small, eg.relationship property, care arrangements forchildren, disputes over Wills, disputes withneighbours, contractual disputes, etc.If the mediation is not successful, the partiesare still able to move the dispute into theCourt arena.Hugh is prepared to provide more informationon the process and costs involved for anyonewho might be interested in taking advantageof the mediation process.1

MML NEWS | July 2011SNIPPETA KING OR A QUEEN –THE LAW OF SUCCESSIONFollowing the recent marriage of Prince William and KateMiddleton, the expectation of children in the future raisesthe question of succession for the future King or Queen ofNew Zealand.Succession to the British Throne is passed on by“male-preference primogeniture”. The rule has been in placefor over 300 years and means male children are preferred overfemale children and an older child is preferred over a youngerchild of the same gender.The British Government is currently consulting withCommonwealth countries about changing the laws on RoyalSuccession to enable an older sister to succeed over ayounger brother.Recently our own Prime Minister, Hon. John Key, has said heagrees that the current rules, which could block the successionof a fi rst born daughter of Prince William and Kate Middleton,are “old fashioned”. However, because the British Monarchis also head of state of Canada,Australia, nine countries in theCaribbean, three in theSouth Pacifi c as wellas New Zealand, itwould have to beapproved by allthese countries.EMPLOYMENT LAW UPDATEIn the case of Costley v Waimea Nurseries Limited [2011]NZERA Christchurch, the Employment Relations Authority(‘ERA’) found that Mr Costley was unjustifi ably dismissed forusing drugs at work because Waimea did not disclose to MrCostley information that was relevant in reaching their decisionto dismiss him.It was reported to Waimea’s nursery manager, Mr Jameson,that Mr Costley and another employee (Api) may be consumingdrugs during their lunch breaks. Mr Jameson met with eachemployee separately and told them of his suspicions. Apiconfessed that he and Mr Costley were smoking marijuana atlunch time. Mr Costley was not told about Api’s admission orthe identity of the person who raised concerns about theirsuspected drug use.The ERA found that by not disclosing Api’s admission to MrCostley, Waimea had withheld the piece of information thatwas most relevant to the decision to dismiss, and that this was abreach of s4(1A)(c) of the Employment Relations Act 2000.This decision serves as a timely reminder that employers mustfollow a fair procedure when disciplining or dismissing employeesincluding providing the employee with any relevant informationthat may be relied on by the employer in reaching their decision.Sleeping on the JobIn Idea Services (an IHC subsidiary) v Phillip DicksonCA 405/2010, the Court of Appeal affirmed the decisionof the Employment Court that Mr Dickson was workingthroughout his sleepover and was therefore entitled tothe minimum wage for the period of his sleepover.Mr Dickson worked for Idea Services Limited as a communityservice worker providing care and support to people with disabilitieswho live in community homes. A requirement of his position wasthat Mr Dickson sleep overnight in the home so that he could dealwith any issues that arose during the night and for security purposes.He was paid $34.00 per sleepover, and $17.66 per hour for any timeduring which he was required to be actively working and tending tothe needs of the residents. If there were no incidents during the nightMr Dickson would receive $34.00, which amounted to between$3.40 and $4.30 per hour depending on the length of the sleepover.Mr Dickson claimed that he was entitled to the minimum wageprescribed under the Minimum Wage Act 1983 (the ‘Act’) forevery hour of his sleepover. This claim was upheld at both theEmployment Relations Authority and the Employment Court.The Court of Appeal was required to consider whether sleepoversconstitute “work” for the purposes of section six of the Act whichstates: “every worker who belongs to a class of workers in respect ofwhom a minimum rate of wages has been prescribed under this Act,shall be entitled to receive from his employer payment for his workat not less than that minimum rate.”The Court of Appeal agreed with the Employment Court thatthree factors must be considered in order to determine whether thesleepover constituted “work”:• the constraints placed on the employee’s freedom to do as he orshe pleases,• the nature and extent of responsibilities placed on the employee, and• that benefit the employer receives from having the employeeperform the role.Mr Dickson had significant restraints placed on him when sleepingover, important responsibilities that he had to attend to withrespect to both the home and the residents, and the employerderived a correspondingly significant benefit. The Court of Appealtherefore agreed that in this instance all of these factors applied to asignificant degree and therefore Mr Dickson’s sleepovers constitutedwork for the purposes of the Act.The Court of Appeal rejected Idea Services Limited’s alternativeargument that the Act was breached only if the employee’s averagerate of pay over a pay period was less than the prescribed minimum.This decision will have a great impact on the disability servicessector. Ralph Jones, chief executive of Idea Services Limited isquoted as saying this decision would cost the organisation about$176 million in back payments. Idea Services Limited have lodgedan application for an appeal against the Court of Appeal decision,and the outcome is likely to be newsworthy.MORTLOCK-MCCORMACK LAWare proud to be a sponsor of, and associated with:The Radio NetworkSpecial Children’s Christmas Party 20112

MML NEWS | July 2011Earthquake Insurance Issues?Below is a simple chart to workthrough some of the options. Ifyou still have specific queries orrequire further advice, our residentexperts Simon Mortlock, PrueRobertson or Sue McCormack willbe happy to assist you.GREEN ZONEYour repair/rebuild process can begin.You or your legal advisor can deal withEQC and your insurer.RED ZONEFollow the Chart below.ORANGE ZONEFurther Government assessment isrequired on your property to determine ifit is in the green or red zone.WHITE ZONEThis area is still undergoing assessment.When assessed, your property will be ineither the green or red zone.YESYou will get a government offer (with twooptions) within 8 weeks of 23 June.RED ZONE FLOW CHARTWas your property insured as at3 September 2010?Before you make a decision on theGovernment options, you will need tounderstand your insurance policy andconsider the state of your house.Your cover may include:NOWait on the Government decision foryour situation in the next few weeks.REPAIR:This generally means you will be paidthe money it would cost the insurancecompany to fi x your house to itspre-quake standard. The insurer may agreeto move the house to a new section andundertake the repairs there. Costs of theremoval will probably fall to you.REPLACEMENT:This generally means your insurer will takeresponsibility for building a new house ona different section, up to the agreedvalue/square metreage in your policy.You may be able to negotiate a cashsettlement if agreed by your insurer.REPLACEMENT WITHINDEMNITY FIGURE:This means that your policy provides fora maximum fi gure payable based on youractual loss of the repair or replacement.Remember, you will need to pay any mortgagee obligations from the settlement payment you receive.Ensure you are confi dent you understand both the government options.CHOOSE GOVERNMENT OPTION ONEHouse and Land: This is an offer from the government to buyyour entire property, including the house and other buildings, fi ttings,fi xtures, and land, at the 2007 Government Valuation amount.The government assumes all the insurance claims (other thancontents claims - you will deal directly with your insurer on this).ORCHOOSE GOVERNMENT OPTION TWOLand only: This is an offer to buy the land portion of yourproperty at the 2007 Government Valuation amount. You oryour legal advisor will deal with your insurer for a payout on thehouse and other insured buildings. Your legal advisor can helpwith establishing the cost for replacing your house.Your legal adviser can assist you to analyse the options open toyou in terms of the Government offers as well as your insurancecircumstances in order to assist you in selecting the best positionpremised upon your individual circumstances. Thereafter a legaladvisor can also assist in the conveyancing process.Things that may have a bearing on this decision, for example, include:• Your individual insurance policy• Any improvements made to your house• Your age, lifestyle and family situation• Your future plans• Expected time frames3

MML NEWS | July 2011Pre-1990 Exotic ForestsFor anyone who has pre-1990 exotic forestry plantations on their propertyof at least 1ha (and subject to other conditions), it is important that they findout what their options are in respect to either collecting free Tax-Free CarbonCredits or opting out of the Emissions Trading Scheme, then make a decisionas soon as possible noting the guidelines below.The options are:1. Apply for a one-off free allocation of theApply for a one-off free allocation of theTax-Free Carbon Credits (“NZUs”) ofup to 60 NZUs per hectare. For example,10ha of qualifying exotic forest (eg.Radiata, Douglas Fir, Willows, Poplars,etc) attract up to 600 NZUs. NZU’scurrently sell for around $18 each. If youapply, you will be part of the schemeand you will need to comply with theobligations and penalties associated withharvesting trees in the future. You haveuntil the end of November this year to fileyour application.2. Do nothing. Under the Emissions TradingScheme, if you choose this option, yourpre-1990 plantation will have to bereplanted within 4 years of future harvest.If not, the land will be deemed to havebeen de-forested for which the landownerwill face a penalty and be required tosurrender carbon credits at the then goingrate. This is the same scenario as underparagraph 1 above, except you do nothave the one-off allocation as a form ofcompensation.3. Apply for a De-forestation Exemption.If you apply for such an exemption youcan do what you like with the land thatholds the forestry with no repercussions.You have until the end of September tofile this application.Quite clearly decisions relating to pre-1990 forestry needs to be made now andwe are able to provide you with adviceand assistance. If you would like to knowmore about what is involved, contact ourAssociate Kent Yeoman.Consumer Law UpdateA Consumer Law Reform Bill(the ‘Bill’) will be introduced toParliament later this year to updateand simplify consumer law. This is inrecognition of the fact that the lawscovering layby sales, door to doorsales, unsolicited goods and services,and the regulations for auctioneershave not been reviewed for some time.The Ministry of Consumer Affairs (the‘Ministry’) released a detailed discussionpaper on Consumer Law Reform in June2010. Extensive consultation has taken placesince that time and, together with submissionsreceived, has resulted in five additional papersbeing produced by the Ministry.The Bill will reform the Consumer GuaranteesAct, the Weights and Measures Act, the LaybySales Act, the Fair Trading Act, the Door toDoor Sales Act, the Auctioneers Act and theUnsolicited Goods and Services Act. Each Acthas been reviewed taking into consideration:• its history, original purpose and ongoingrelevance, and• any gaps in the law, and the effectivenessand overall enforceability of the Act.It is beyond the scope of this article to describeall of the reforms proposed, however, listedMeg, Simon, Nico and JJ welcome theirnew little man Luca Samuel Ford whowas born on 15 March 2011 weighing6lb.10oz.below are some that may be of interest:• The Fair Trading Act will be amendedto update and simplify consumer lawrelated to layby sales, unsolicited goodsand services, door to door sales,and theregulation of auctioneers. It is proposedthat infringement notices for minorbreaches of the Fair Trading Act will beissued by the Commerce Commission.• The Consumer Guarantees Act will beamended to require greater disclosureto consumers on express warranties andprovide consumers who take up coverunder express warranties a statutorycooling off period.• Changes will be introduced to productsafety protections. The Minister will beempowered to issue Government ProductSafety Statements that will provide someguidance on acceptable product safety.Notification of product safety recalls willbe mandatory and recalls will be publishedon the Ministry website. Goods that arerecalled may be required by the Ministry tobe destroyed and a supplier may be askedby the Ministry to stop selling a product ifit has been implicated in a serious incident.• The law related to auctions will beupdated. The Consumer Guarantees Act“acceptable quality” provisions will applyto goods sold by auction, online, and tothose sold by tender. The AuctioneersAct will be repealed and minimumstandards will be set for the registration ofauctioneers and the conduct of auctions.• Unsubstantiated claims will be prohibitedunder the Fair Trading Act. The Ministryanticipates this measure will assist theCommerce Commission in enforcingthe Fair Trading Act as well as assistingconsumer confidence and good marketconduct.• The jurisdiction of the Disputes Tribunalwill be extended to cover complaints aboutdeceptive and misleading conduct andto provide for the full range of remediesavailable under the Fair Trading Act.To keep up to date with the Bill and theproposed changes readers may wish to visitthe Ministry websitewww.consumeraffairs.govt.nz.Mortlock McCormack Law99 Clarence Street, RiccartonPO Box 13 474Christchurch 8141Telephone +64 3 377 2900Facsimile +64 3 377 2999Email law@mmlaw.co.nzwww.mmlaw.co.nzDisclaimer All information in this newsletter is to the bestof the authors’ knowledge true and accurate. No liability isassumed by the authors, or publishers, for any losses sufferedby any person relying directly or indirectly upon this newsletter.It is recommended that clients should consult a seniorrepresentative of the fi rm before acting upon this information.4