Business - Parry Field Lawyers

The Trade Marks Act 2002 outlines that trade marks must be rejected if they are likely to offend a significant section of the community. The first part of this article discusses trade marks that are likely to offend a significant section of the community more broadly, while the second part focuses specifically on trade marks that are likely to offend Māori.

Likely to offend a significant section of the community

Adopting the Macquarie Dictionary’s definition, the Intellectual Property Office of New Zealand (IPONZ) acknowledges the word ‘offend’ means to ‘irritate in mind or feeling’ and ‘to cause resentful displeasure in’. Under this definition, when assessing whether a trade mark is likely to offend a significant section of the community, IPONZ outlines that its examiners will take into account the following considerations:

– Each case must be decided on its own merits.

– The question must be considered as at the date of application.

– The question must be considered objectively, from the point of view of “right-thinking members of the public”.

– A mark should be considered likely to offend a significant section of the community where:

– The mark is likely to cause a significant section of the community to be outraged; and/or

– A significant section of the community is likely to feel that the use or registration of the mark should be the subject of censure.

– A significant section of the community is likely to feel that the mark should be the subject of censure where the mark is likely to undermine current religious, family or social values.

Influential on the New Zealand approach to assessing what suffices ‘a significant section of the community’ was the 1976 ‘Hallelujah Trade Mark’ case in the UK. When deciding whether to allow the trade mark ‘Hallelujah’ as the name of a women’s clothing brand, the Registrar’s Hearing Officer found the trade mark was “reasonably likely to offend the religious susceptibilities of a not insubstantial number of persons”.

Although this trade mark application might be decided differently today, the Hearing Officer stressed that rejection of an application is warranted even where the group of people offended are a minority, so long as they are substantial in number. Influenced by this UK decision, IPONZ also outlines that its examiners will also take into account the following considerations:

– The significant section of the community may be a minority that is nevertheless substantial in number.

– A higher degree of outrage or censure among a smaller section of the community, or a lesser degree of outrage or censure among a larger section of the community, may suffice.

Lastly, one interesting principle that the IPONZ examiner will consider is that the application should not be rejected merely because the mark is considered to be poor taste. In a more recent decision by the Office for Harmonisation in the Internal Market (the trade mark registry for the European Union) the previous examiner had rejected the trade mark ‘Dick & Fanny’ on the basis it could offend a significant portion of English speaking consumers. However upon appeal, the trade mark was accepted, on grounds that the trade mark “may, at most, raise a question of taste, but not one of public policy or morality”.

This decision has made it clear that a distinction should be drawn between trademarks that are offensive and trade marks that could be considered poor taste. While the former will be rejected, registration of the latter is not necessarily prohibited.

Likely to offend Māori

In the mid 1990’s, in response to claims that the Trade Marks Act 1953 insufficiently protected Māori intellectual property, the New Zealand Government established the Māori Trade Marks Focus Group. On the focus group’s recommendation, the commissioner now has access to the Māori Trade Marks Advisory Committee when making decisions on Māori trade marks. While not binding, the committee provides advice to the commissioner to minimise the risk of registering trade marks that are likely to cause offence to Māori.

All trade mark applications using Māori text or imagery will be referred to the advisory committee, who will then make a recommendation to the commissioner. One of their key considerations concerns the Māori words ‘Tapu’ and ‘Noa’. Tapu is the strongest force in Māori life, and can be used to describe people, objects or places that are ‘sacred’ or carry ‘spiritual restrictions’. Conversely, noa can be used to describe people, objects and places that are ‘common’, from which the tapu has been lifted. Therefore, trade marks that combine or associate tapu and noa can be considered offensive or inappropriate to a number of Māori.

For example, in 1927 the ‘Native Brand Co’ produced Worcester sauce under a logo that depicted a rangatira (Māori Chief, which is a position considered tapu). IPONZ considers that such a trade mark would not likely be registered today, because associating tapu (a Māori Chief) and noa (a household food items) signifies an attempt to lift the tapu of a Māori Chief, which could be considered offensive.

In some circumstances, it may be appropriate for a Māori name to be gifted to a business or organisation by tangata whenua – the Māori people of the land. Such a gifting or blessing is often done in accordance with mana whenua – the mana or power that comes from the land or rights to the land. A recent example was the gifting of the name ‘Tūranga’ to the new Christchurch City Central Library by Ngāi Tūāhuriri, a subtribe of Ngāi Tahu. Because the name honours a North Island settlement that was home to the Ngāi Tahu ancestor Paikea, use of the name without Māori consent could have likely been considered offensive.

If you are still unsure whether your trade mark might be considered as too offensive to be registered, you may like to consider getting a ‘Search and Preliminary Advice Report’ from IPONZ. This preliminary assessment will give an indication whether your Trade Mark will be allowed. You can read our article about getting a Search and Preliminary Advice Report here.

Should you need any assistance with these, or with any other Commercial matters, please contact Kris Morrison or Steven Moe at Parry Field Lawyers (+64 3 348 8480).
For a more general overview of registering a trade mark, please see our original article here.

Some of our staff from Parry Field recently attended an Institute of Directors seminar on the topic of culture and board. These are some key points that emerged that we thought were worth sharing:

When it comes to culture, Board members will always be looked at – so what culture will they model for those in the organisation?
Boards have a dual leadership role ensuring accountability (ensuring that purpose and values are kept to) and assurance (ensuring that executive is taking to action to achieve the desired culture.
Values may be written and put on the wall, with a vision statement and policies – those are visible, but they are just the tip of the iceberg. There are also invisible factors such as the water cooler conversations, the shared myths over what is important and the “unwritten rules”. An example is the the myth that Kodak did not innovate enough, when in actual fact they invented the first digital camera well ahead of the game. They commercialised one of the first digital cameras in the 1990s and spent a lot on R&D, but the people at the top of Kodak were ‘film’ people with 80% market share. So while values did not include profitability, ultimately the unwritten value, the invisible factors, drove the decisions that led to their end.

Reflection

How well is your culture living and breathing in your organisation? The key is that all of this needs to stay on the radar!
There are some key elements of culture indicated in the “Johnson and Scholes Cultural web” that include:
- Stories – who is respected within the organisation? How are the events that occur interpreted?
- Symbols – for example, who has open plan, who has corner office, who has car park?
- Rituals and Routines – morning teas, Friday evening drinks etc.
- Power Structures – who has the power within the organisation (whatever their title)?
- Organisational Structure – what do informal relationships signal (for example, does the Chair defer to someone else on certain things)?
- Controls – what is it that controls how things are done in the organisation? An example is asking whether budget and profit are valued over values (which could mean a person simply meets targets but does not model what the organisation stands for).

(More information here).

The real focus and point of this article was to make you aware of visible and invisible factors and the messages that are sent through the key elements set out above. It is important to make sure that values are understood and clearly communicated.

This article is not a substitute for legal advice and you should speak to your lawyer about your specific situation. Please feel free to contact us at 03 348 8480 or by email Steven Moe – stevenmoe@parryfield.com

An independently published New Zealand book called “Better Work Together” just came out at the end of 2018. The short summary of this review is: Go order a copy. Why? Because it’s co-authored by many local New Zealander entrepreneurs with diverse backgrounds and it really deserves to be better known as it is a quality business focused book that challenges existing paradigms of what is possible. It is packed full of wisdom based on real life experiences of these entrepreneurs who are also community builders at heart.

The subtitle is “How the power of community can transform your business”. The key theme that flows through all of it is relating how community can form around business. The context for the book is critical because it comes out of the Enspiral network which is based out of Wellington and started about 10 years ago. Each of the authors has been involved to a greater or lesser degree in that “community of entrepreneurs experimenting at the edges of ownership, governance, decision making, resource sharing and organisational design”. Elsewhere, the Enspiral community is described as “a worker owned ecology of professional services businesses”. This book is really a record of some key learnings from those who have been actively involved in that community.

You can see the impact that being involved in Enspiral has had on the journey of those who have contributed essays because they are mainly reflections on what each person has learned. There are 11 such essays that go a lot deeper than some of the other shorter resources which are included (my favourite of those being what can be learned about community from sourdough bread – with a recipe!).

The topics of the essays are wide ranging, from “Welcome to the age of participation”, “Saying yes to purpose”, “Start with I”, and “Finding the stuff that matters”. The thing that I appreciate about the perspectives shared is that the authors are very real and open about their journeys and frustrations and what they have learned along the way about how community and work can, or could, interact. While based on their experiences in Enspiral it is clear there is application beyond that community and I can see things that resonate in my own context here in Christchurch and other places I visit around Aotearoa.

To give a flavour, one essay is called “21st Century Leadership” and in that – the closing essay – Silvia Zuur talks about what she thinks leadership will look like in the future. She starts by asking “What qualities make a new leader?” and starts the essay with this answer: “The number one quality is to be curious. An innate inquisitiveness is needed to do this work. A wish to know why things are the way they are and an unwillingness to accept the status quo, or to accept the current reality as a given”. This resonates with me because in the 90 interviews I’ve done on seeds podcast I find it is that quality of being curious and asking the right question that unlocks the best responses from people. It was nice to have that idea confirmed by this essay.

Producing authors Anthony Cabraal and Susan Basterfield have woven something together that is greater than each of the individual pieces. The book is almost 300 pages long so there is a lot of content but it has been well designed so it is more than just text – there are graphics and quotes throughout as well. In addition to the essays there are multiple resources included – some are just one page while others are much longer. Topics range from “Patterns of decentralised organising”, “The open startup”, “5 threads that weave strong community fabric”, “Buzzwords: unpacked”, “Unfolding purpose: A 5 step journey” and a lot more.

No book is perfect and I would love to have understood how legal structures and the constraints of available forms have themselves impacted (or not) on community building in start-ups. For example, the differences between cooperative companies with employees who are shareholders as opposed to traditional limited liability companies with shareholders who may not even be involved the business itself. What are the pluses and minuses and what influence does the structural form chosen have on building community where you are seeking to achieve something more than just generating profits? Is there a better model that maybe hasn’t been invented yet that really empowers both impact and the development of a community among those involved and what might that look like? However, this is a small side note on an area of personal research and interest and overall the authors have created a commendable resource that deserves to be bought and studied in detail. It is really great to see that high quality content is being produced like this here in New Zealand.

The biggest challenge from the book relates back to how community can grow through business. This quote in the book perhaps captures some of the essence and the heart that is clearly standing behind why it has been written: “Happiness is when what you think, what you say, and what you do are in harmony.” Ghandi.

Better Work Together is accessible here (www.betterworktogether.co/)

By Steven Moe, Partner at Parry Field Lawyers, empowering impact.

Steven is a lawyer and Partner at Parry Field Lawyers helping those pushing boundaries of the existing paradigms of thinking and has a focus on empowering impact, he hosts the podcast seeds which has almost 100 interviews and more than 26,000 listens.

We are fortunate in Christchurch to have a great ecosystem supporting entrepreneurs and start-ups. One of the weekly events that I always encourage people to head along to is Coffee & Jam which has been running every Tuesday at EPIC from 12:30-1:30 for many years.

The hour long format is simple – a pitch from a start-up or established entrepreneur. A break in the middle for networking. Another pitch, often with an educational or social enterprise slant. A shout out time to inform others of things going on in the community. All this is delivered with the food and drink of the title promised in the form of both coffee and jam (great bread and spreads).

We’ve presented a couple of times and it is always a very welcoming and friendly crowd. Here are some videos:

The time we juggled talking about start-ups

The time we chatted about Seeds Podcast

I asked Jack Whittam, who was an intern at Parry Field Lawyers over the summer of 2018-2019, what he thought of his first visit and he said: “The foundations of Coffee and Jam are a show reel of what Christchurch has learnt from its own shaky foundations; innovation, courage, and at the centre – community. In an age where self-promotion is vital for business exposure, it was encouraging to see this done in a way that is friendly, unpretentious, and gives value to others by sharing from both failures and success.”

To find out more, visit here

This review outlines the key messages in “Building a Story Brand: Clarify your message so customers will listen”. Donald Miller is an American author who runs a podcast of the same name. He has written a variety of books over the years (I remember reading “Blue like Jazz” about 15 years ago).

The premise is that you can approach telling your brand by thinking about the story that your customers can resonate with. So what are the drivers behind people making decisions to purchase a product or engage you to provide services? The promise is that the book will transform how you think about who you are, what you do and the unique value that you can bring to your customers.

It all boils down to the fact that movies are predictable, but we still go see them, because we identify with the narrative arc of the characters even if we know how it ends. Think about romantic comedies, buddy films, superheroes – they all are basically very similar. The introduction lays out the premise: “This is not a book about telling your company’s story … customers don’t generally care about your story; they care about their own. Your customer should be the hero of the story, not your brand. That is the secret every phenomenally successful business understands.”

So the central theme is clear – put you customer’s stories above your own. The question is how you go about doing that and the guidance takes the form of a framework. Underpinning that is the principle that you need to explain how your company will help people survive and thrive and explain that in a simple way. The example given is Apple, which went from advertising with long articles about technical specifications to simply two words on a billboard: “Think different”. They realised that communication needed to be simple and ‘tell the story’ of how their product could help the consumer become the hero. Buying a product became about being an alternative thinker. Amazing really. They clarified the role they can play in their customers life and communicated that simply.

So down to the actual framework proposed, the key point is that every story has the following elements and you need to tell your story so it resonates with each of these points:

1. A Character – The customer is the hero, not your brand

2. Has a problem – Customers buy solutions to their problems

3. Meets a guide – Customer wants help from a guide (Yoda)

4. Who gives them a plan – Someone who offers a plan is trusted

5. And calls them to action – Needs some challenge from the guide to take action

6. That helps avoid failure – The customer wants to avoid a tragic ending

7. And ends in success – Tell the customer how their lives can be changed

In working out how your brand will do the above the book also looks at websites and notes that they should clearly state what the offer is eg “We help you cook like a pro” or “We make better websites”. So the idea here is that the website itself should be aspirational, promise to solve a problem, state what they do, and have obvious calls to action.

The last part of the book deals with the fact that if you can tell the story well then it will also be useful for your team to understand how they fit in the scheme of things. So, this can help call people back to the mission of the company – which may not have been clear in the first place.

I found this book was interesting to read through because so much of it made logical sense but I hadn’t seen it expressed in the way it was here before. I recommend it if you are looking at your own branding and messaging and thinking about how that could be improved.

Note: While this was not a legal book or a review focusing on legal issues we see the “telling the story” as an issue all of our clients face. So, we hope this summary is a useful tool for you as you revisit how you are telling your story in the market. Do you know a book we should review here? Drop us a line and let me know on stevenmoe@parryfield.com

Steven Moe

Parry Field’s Senior Associate Steven Moe was recently interviewed by E Wen from The Teen Entrepreneurs:

Why did you start the Seeds Podcast?

I wanted to tell good stories, and podcasts are a great platform to connect via audio and go deep with people to really find out what makes them tick.

We can get to the ‘why,’ not just superficially stake over what people ‘do.’

Our interviews typically last for an hour, so I can ask guests about their childhood, that time they lost someone close to them, what it meant to move countries…

All that then informs the second half of the interview, where we do talk about what they are doing.

My hope is simple: to tell stories that inspire others to start their own.

What’s your Story and the back story to Seeds?

My day job is as a lawyer helping entrepreneurs, so I kept meeting people with amazing stories but often no platform to share their own journeys and what they have learned on the way!

The podcast provides that platform and now has more than 80 such stories.

I did a history degree and so for me, the Seeds podcast is like recording contemporary history, so that a moment in time is crystallised and others can learn from that.

I try to get real diversity so every week the listener will be surprised at how different it is to the last week.

For example, I might jump from an entrepreneur to a poet, to someone with a disability – but consistent across all of them is that these are people acting with purpose in their lives who look to make our world better.

As for me personally, I love to read stories and write them and tell them and have also lived in six different countries for more than a year each, so I appreciate the incredible diversity and beauty of our world.

Seeds is one way for me to help get some good stories out. I grew up here in New Zealand (despite my accent) and returned at the start of 2016 after 11 years overseas working for an international law firm in Tokyo (four years), London (three years) and Sydney (four years).

In my work as a lawyer offshore I had gotten used to large scale commercial transactions (occasionally in the billions of dollars!).

On my return, I was looking to do things differently and embrace the mid-life crisis of ‘what my purpose’ was. So, I have had a shift in focus while continuing to work as a lawyer.

That led me to write Social Enterprises in New Zealand: A Legal Handbook (a free ebook I send out to anyone who wants it).

I also wanted to find ways to ‘add value’ and kept meeting amazing people with stories that deserve to be told but had no platform for that.

So that was the reason I explored the idea of a podcast and Seeds was born from that.

As for the name, Seeds look dead – give them the right conditions and new life springs up.

I want each interview to be like a seed that people listen to and something may grow from it in their own lives.

What does Social Entrepreneurship mean to you?

To me, it is about connecting the heart (why we want to do something) with the mind (the rational business focus).

Too often we let ourselves be dictated by our mind and pursuing a career and leave our hearts behind.

Social enterprises unite the heart and mind because you are using your mind through business to advance a social or environmental cause which is driven by your heart.

So, you can start a business you believe in!

The next generation gets this stuff easily – in the entrepreneur incubators I see many initiatives that have some social or environmental outcome they are aiming for as well.

Imagine you have been transported back in time. Reliving life as a teenager, what would you want to change?

I often ask guests what they would change. Most say … nothing!

I agree with that. Because each of us have our circumstances and the journeys that formed us. Embrace it, learn from it, let it shape you and give you empathy with others.

Really listen. Stay curious.

When I was 20, I moved to Japan for a year to teach English. Many people said I should finish a degree and start work but my reasoning was:

1. Don’t make choices that mean you will live with regrets and ‘what ifs’
2. When I am 90 looking back on my life, taking a year out to explore the world will have made me a richer person. It did!

What has been your biggest obstacle in establishing Seeds?

One thing is that I get very little feedback from listeners. I know 22,000 people have listened across all the episodes, but I don’t know their identities or if it really helped them, apart from they keep listening and numbers grow!

So, it can be a little lonely to work hard on something like this and get little feedback.

However, when I do get feedback, it is usually enough to keep me going – like someone who wrote to thank me as it had helped them in a career decision.

Someone else thanked me for recording their father’s life as he died two months later of his cancer.

If you listen and subscribe to Seeds – leave a rating or review so I know what I’m doing right!

What’s one piece of advice you’d give to young people finding their own way in entrepreneurship?

Take time to reflect and know who you are before you decide what you will do.

Peter Drucker was one of the most influential thinkers on management of the last century. He was born in 1909 and died in 2005 so his life spanned a century during which he wrote 39 books and countless articles. While I had heard his name before, he came to my attention recently when I was preparing a reflection about what we each are building with our lives here. He had made a story famous which I used and so it sparked an interest to learn more about him as well.

So when I came across a piece by him in a compilation book of articles called “On Leadership” by the Harvard Business Review, I was curious to see what he had to say on the topic of what makes an effective executive. Essentially his argument is that to be an effective leader it is not so much about charisma or whether a person is introverted or extroverted. Instead he boils it down to eight essential questions or patterns of behaviour which really set them apart. Some of the key ones were:

Thinking and saying “we” rather than “I” – authority comes from gaining others trust so consider what the organisation needs not what you need;
Developing of action plans – specify what the results are that you want and understand where the constraints are to achieving them. Include check in times and also the ability to pivot to seize new opportunities;
Taking responsibility for decisions and communicating those – accountability is important so be clear about who makes decisions and regularly review processes;
Focussing on opportunities, not problems – putting out fires and solving problems is short term and to grow an organisation needs to seek out new opportunities. Match your best people with the best opportunities; and
Running productive meetings – be clear about the reason for meeting and finish them once that objective is achieved. “Good executives don’t raise another matter for discussion”. Then follow up to summarise the meeting and agreed next steps.

The short article was consistent with other things I have read by and about Peter Drucker as they always emphasise having a strategic approach focussed on the long term. For me the key takeaway was the first point mentioned about the words we use. It is tempting in our individualistic culture to talk about ourselves and “I” more than emphasising team and “we”. But the language that we use is a model for how we actually perceive things and so it is important to be conscious and deliberate in how we choose our words.

Several months ago we wrote an article on the key changes to the Overseas Investment Act coming into force later in the year (the article can be found here). The Overseas Investment Amendment Bill passed its third reading on Wednesday the 15^th of August and received royal assent on Wednesday the 22nd of August. The changes are expected to come to effect in October 2018.

These are the key changes that you need to be aware of if you are a non-resident foreign buyer hoping to purchase property in New Zealand:

Scope of “sensitive land” to include “residential land”

The biggest change to the Overseas Investment Act is that the scope of “sensitive land” within the overseas investment regime is being broadened to include “residential land”. This is going to make it more difficult for overseas investors to purchase residential land in New Zealand, as they will need to apply for consent from the Overseas Investment Office which will require that the investment is going to, or is likely to, benefit New Zealand.

You will not need to apply for consent if you hold a residence class visa, have been living in New Zealand for at least 12 months, have been present in New Zealand for at least 183 days of those 12 months and are a New Zealand tax resident.

We have also published a more detailed article on the effect of this change, which can be accessed on our website here.

Forestry rights and interests:

The amendment will also impose stricter regulations on the purchase of forestry rights and interests, requiring the application for consent under one of two pathways – the “modified benefits test” or the “special benefits test”.

It should also be noted that it will be the obligation of the purchase to ensure that they are complying with the Overseas Investment Act.

If you would like to have a look at the Overseas Investment Amendment Bill, you can access it here.

If you have any questions or concerns arising out of this article, please feel free to get in touch. This article is not a substitute for legal advice and you should talk to your lawyer about your specific situation.

Kris Morrison – krismorrison@parryfield.com

Paul Owens – paulowens@parryfield.com

The purpose of the Credit Contracts and Consumer Finance Act 2003 (“CCCFA”) is to protect the interests of borrowers by placing obligations on creditors to be responsible lenders. It does this by providing general rules of credit contracts and by setting out disclosure requirements for consumer credit contracts. This article discusses these rules and requirements to help you understand your obligations as a lender, or your rights as a borrower.

Credit Contracts vs. Consumer Credit Contracts:

The CCCFA defines both general credit contracts and consumer credit contracts. A credit contract is defined in section 7 as a contract under which credit is or may be provided. On the other hand, a consumer credit contract is a loan taken out by a natural person who is going to use the funds for wholly or predominantly (more than 50% household or domestic use (this for example could be a mortgage for a house, but it does not include a loan for investment purposes). There must also be interest charges or credit fees and the creditor must carry on a business of providing credit or make practice of entering into credit contracts.
A consumer credit contract carries with it additional disclosure obligations that are imposed on the lender to ensure that the interests of the borrower are adequately protected.

A loan might fit under the class of a consumer credit contract, but it will definitely constitute a credit contract. It is generally presumed that where a party claims that a credit contract is a consumer credit contract, it will be just that. However, as set out in section 14 of the CCCFA, the borrower can make a declaration before entering into the contract stating that the credit is going to be used for business/investment purposes and that it is therefore not a consumer credit contract.

Responsibility of lenders:

The responsibilities of lenders are set out in section 9C of the CCCFA. These are not binding on the lender but it is strongly advised that they are complied with as they can be used as evidence to prove that the lender was a responsible one. Where applicable to the particular contract, the lender must at all times:

a. Exercise the care, diligence and skill of a responsible lender.

b. The lender must make reasonable inquiries in relation to the borrower before they enter into the agreement. In particular, they need to be satisfied that the credit provided will meet the borrower’s requirements, and that the borrower will not be subject to substantial hardship when they make payments under the agreement.

c. Assist the borrower in reaching an informed decision as to whether or not to enter into the agreement and to be reasonably aware of the full implications of entering into the agreement. This includes ensuring that any advertising is not likely to mislead and that the terms of the agreement are expressed to the borrower in a clear, concise and intelligible manner. The same goes for information provided after the contract is entered into, and any subsequent dealings, insurance contracts, and guarantees.

d. Treat the borrower and their property reasonably and in an ethical manner.

e. Ensure that the agreement is not oppressive.

f. Meet lender’s legal obligations under various other statutes including the Fair Trading Act 1986 and the Consumer Guarantees Act 1993.

The main thing is that lenders ensure that the credit contract is not harsh or oppressive, and that the borrowers are aware of any implications associated with the contract.

What should a credit contract (for example, a loan agreement) include to ensure compliance with the CCCFA?

What needs to be done in order to comply with the CCCFA largely depends on the nature of the particular credit contract. Ultimately though, the CCCFA is seeking to ensure that the borrower is properly protected and that the lender has been a responsible lender and has made sure that the borrower is fully informed as to the nature of the agreement and the implications of entering into it. Consumer credit contracts require an initial disclosure statement as well as continuing disclosure statements to be made at least every six months (where applicable).

Initial Disclosure Statements

A consumer credit contract needs to make key information available in a clear and concise manner to the borrower such as interest rates, default fees and the borrower’s right to relief or cancellation. It is essential that the implications of entering into a credit contract are made known to the customer.

Before a contract is entered into, the following information (in summary) must be disclosed to the consumer (where applicable to the contract), pursuant to schedule 1 of the CCCFA:

a. Full name and address of creditor;
b. Initial unpaid balance;
c. Subsequent advance;
d. Total advances;
e. Credit limit;
f. Annual interest rate;
g. Method of charging interest;
h. Total interest charges;
i. Interest free period;
j. Credit fees and charges;
k. Payments required;
l. Fully prepayment;
m. Security interest;
n. Disabling devices;
o. Default interest charges and default fees;
p. Debtor’s right to cancel;
q. Debtor’s right to apply for relief on grounds of unforeseen hardship;
r. Continuing disclosure statements;
s. Consent to electronic communications;
t. Dispute resolution and Registration under Financial Service Providers (Registration and Dispute Resolution) Act 2008.

This information needs to be disclosed in a way that is clear, concise and intelligible.

Continuing Disclosure Statements

Continuing disclosure statements must also be made pursuant to section 19 of the Act, insofar as they apply to the contract. These are summarised as follows:

a. The opening and closing dates of the period covered by the statement; and
b. The opening and closing unpaid balances; and
c. The date, amount, and a description of each advance during the statement period; and
d. The date and amount of each interest charge debited to the debtor’s account during the statement period; and
e. The date and amount paid by the debtor to the creditor, or credited to the debtor, during the statement period; and
f. The date, amount and a description of each fee or charge debited the debtor’s account during the statement period; and
g. The amount and the time for payment of the next payment that must be made by the debtor under the contract; and
h. The annual interest rate or rates during the statement period (expressed as a percentage or percentages); and
i. In the case of a credit card contract, a prescribed minimum repayment warning and other prescribed information in connection with payments under a credit card contract.

A continuing disclosure statement may not be required in certain situations, for example where interest charges or credit fees are not charged. The full list of exemptions is set out in section 21 of the CCCFA.

This article is not a substitute for legal advice and you should talk to a lawyer about your specific situation. If you have any questions arising out of the above, please feel free to get in touch. You can contact Kris Morrison – krismorrison@parryfield.com or Steven Moe – stevenmoe@parryfield.com or give us a ring on 03 348 8480

New Zealand has passed a law called the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (“the AML/CFT law” for short). The purpose of the law reflects New Zealand’s commitment to the international initiative to counter the impact that criminal activity has on people and economies within the global community.

Recent changes to the AML/CFT Act mean that from 1 July 2018 lawyers must comply with its requirements. Lawyers must do a number of things to help combat money laundering and terrorist financing, and to help Police bring the criminals who do it to justice. The AML/CFT law does this because the services law firms and other professionals offer may be attractive to those involved in criminal activity.

The law says that law firms and other professionals must assess the risk they may face from the actions of money launderers and people who finance terrorism and must identify potentially suspicious activity.

To make that assessment, lawyers must obtain and verify information from prospective and existing clients about a range of things. This is part of what the AML/CFT law calls “customer due diligence”.

Customer Due Diligence Requirements

Customer due diligence requires a law firm to undertake certain background checks before providing services to clients or customers. Lawyers must take reasonable steps to make sure the information they receive from clients is correct, and so they need to ask for documents that show this.
We will need to obtain and verify certain information from you to meet these legal requirements. This information includes:

your full name; and
your date of birth; and
your address.

To confirm these details, documents such as your driver’s licence or your birth certificate, and documents that show your address – such as a current bank statement – will be required.
If you are seeing us about company or trust business, we will need information about the company or trust including the people associated with it (such as directors and shareholders, trustees and beneficiaries).

We may also need to ask you for further information. We will need to ask you about the nature and purpose of the proposed work you are asking us to do for you. Information confirming the source of funds for a transaction may also be necessary to meet the legal requirements.

If you cannot provide the Required Information

If we are not able to obtain the required information from you, it is likely we will not be able to act for you. Because the law applies to everyone, we need to ask for the information even if you have been a client of ours for a long time.

Before we start working for you, we will let you know what information we need, and what documents you need to show us and let us photocopy.

Please contact the lawyer who will be undertaking your work, if you have any queries or concerns.