Insights & Articles

Non-Executive or Passive Directors and Directors' Duties: The Courts Take no Excuses for a "Hands Off" Approach

In New Zealand, there are few prohibitions on who can become a director of a company, and no real qualification requirements. This means that some people become directors without actually understanding what their role requires. This can result in a company not being managed and governed as required by the Companies Act 1993 ("Act"), which in turn can lead to a breach of duty, which can have very serious consequences, up to and including personal liability for company debts or even criminal sanctions in the worst of cases.

Mike Pero was the sole director of MPRE Limited and its wholly owned subsidiary MP Real Estate Limited (the MPRE Companies), companies described in the decision as a joint venture between a company ultimately owned by Mike Pero that held a 50% stake and MP Mortgages Limited which held the other 50% stake.

Companies that provide goods or services on standard terms (including credit terms) should be regularly having a legal health check of their terms and their practices for ensuring the terms they are using accurately reflect their business practices, meet all of their requirements and cover off their key risks – as well as ensuring they are appropriately brought to the attention of customers or clients so that they are valid, enforceable or binding.

Unfortunately situations where Tenants are unable to pay rent on their leased commercial premises happens all too often. As a commercial property Landlord, knowing your rights and what to do if this situation arises will help minimise your losses.

Buying a new build "House and Land" package has become a popular option for many first home buyers. It can involve a deposit lower than 20% of purchase price (depending on finance), and means you have the time it takes to build to keep saving towards the purchase of your new home.

It is common knowledge that when a married couple in New Zealand gets divorced, they, generally speaking, get half each of all the property owned by the parties. In New Zealand this asset division also extends to de facto relationships of more than three years, but what is a de facto relationship? A marriage is easy to identify: there is a wedding, someone cuts the cake, there is usually an adorable child in charge of the rings and most importantly, a legal document; a marriage certificate which says you are married. However, de facto relationships are not so easy to identify.

The truism that charity begins at home might have been given a serious knock back going by the recent UK Supreme Court decision concerning an adult daughter's claim against her mother's estate in IIott v Mitson [2017] UKSC 17.

Passed on 1 March 2017, the Contract and Commercial Law Act 2017 ("CCLA") represents a step taken by our Parliament to consolidate and modernise New Zealand's law relating to contracts and sales. The CCLA will come into force on 1 September 2017.

There are a large number of statutes that potentially apply to any business providing financial services or products in New Zealand. We are aware from prosecutions by regulators and from assistance that we have provided to clients, that many people are unaware of the full compliance requirements that relate to their business. In some cases, businesses may comply with one statute, but are unaware that there are other statutes that apply.