Business - Parry Field Lawyers

Was able to attend some of the Living Economies Expo held in Lyttelton. They had an interesting line up of speakers and topics for the three day event. Information about it can be accessed here.

Because 31 March was financial year end I was in the office most of the day trying to get a major business sale completed but that’s the way things go sometimes! However I was able to get out for the panel discussion and have dinner.

The model for the event itself is worth commenting on as it was pitched as a “co-created event” – one example of that was we were asked to bring our own plates and cutlery. Volunteers ran it and the amount they paid to attend could reflect the contribution they had made in non-monetary terms. This is an interesting model in an era of corporate events and made the entire thing feel very “grass roots” – in a good way. It also fit in very well with some of the concepts discussed and being looked at by those attending such as alternative currencies that complement money (eg the Lyttelton Time Bank).

There was a wide range of ages and stages represented and it was really good to see the exchange of ideas taking place across generations. The pitch for it was: “Imagine a country which respects the living planet; whose people enjoy fair land tenure, good housing, good health, wholesome food, a rewarding livelihood, free education, a compassionate justice system, and an adequate income: a country with an inclusive democracy grounded in vibrant communities. This could be Aotearoa New Zealand – together, we can make this vision a reality.”

The panel discussion featured Nicole Foss, Phil Stevens, Raf Manji and Daryl Taylor on “Policies that encourage and facilitate” (bios are on the website here) – it was an interesting discussion about many topics including the future and need to develop systems and ways of operating that are an alternative to the “standard way” that things are done now. As an example, over dinner I chatted with some people who were involved in savings pools where many people deposit money and it can then be accessed by others for different purposes (rather than needing to go to a traditional bank and obtain a loan).

I enjoyed attending and learning about some of the thinking that is going on in this area.

Clean Water Package Controversy

The government recently announced its Clean Water Package. The release has caused considerable controversy, largely around the proposed target of 90% of rivers and lakes being ‘swimmable’ by 2040 and, in particular, the E.coli guidelines for swimmable rivers being 540 E.coli per 100mls.

The Green Party and Labour Party were vociferous in their criticism of the government’s announcement largely because the amount of E.coli that can be present in swimmable water has doubled.As well, Forest and Bird advised the Minister for the Environment, Dr Nick Smith and the Minister for Primary Industries, Nathan Guy that it was withdrawing from the Land and Water Forum. Forest and Bird is a very influential pressure group in this arena; it took legal action in relation to the proposed Ruataniwha Dam and that matter is still being litigated.

The Land and Water Forum brings together groups of stakeholders such as industry groups, electricity generators, environmental and recreational bodies, iwi, scientists and other organisations with a stake in fresh water and land management. The purpose of the forum is to try to develop a common direction for fresh water management and provide advice to the government on this issue. There are 67 non-government participants, and 13 central and local government partners that include local authorities and various government departments.
The issue of fresh water standards for waterways is highly political and is likely to remain this way in the foreseeable future.

Where to from here for farmers?

Where does this government announcement leave farmers? Is their position any different from that set out in our article in the Autumn 2016 issue of Rural eSpeaking which covered the Resource Legislation Amendment Bill 2015 which, when (or if), enacted will give the government power to prescribe regulations to fence waterways?
In answer to the questions posed above, the release of the Clean Water Package doesn’t change the position of farmers at all. Sheep and cattle have been identified as major contributors to the level of E.coli in rivers and streams, and any attempt to control levels of that bacteria will involve keeping animals out of those waterways as far as possible.

The government’s tinkering with the definition of ‘swimmable’ will have little effect on the need to keep animals as far as possible away from our streams and rivers.
As much as anything, the current furore over the government’s package shows that the issue remains highly political – particularly with 2017 being an election year. There are well-funded and high-powered pressure groups involved; farmers cannot expect any relaxation in the fencing proposals that are currently on the table.
Interestingly enough shortly after the Clean Water Package was announced, the Environmental Defence Society released a report entitled ‘Last Line of Defence: Compliance, monitoring and enforcement of New Zealand’s environmental law.’

Local authority compliance

One of the areas that the report examined was resourcing, as well as the technical capacity, for local authorities’ compliance functions. While the report noted that regional authorities have been demonstrating increasing technical capacity for their compliance function, there is still a concern that there is political influence on decision-making, including the allocation of resources.
Clearly, monitoring compliance with the fencing of rivers and streams is going to impose a considerable burden upon our regional and unitary authorities.
In the meantime, however, we will keep you informed on the debate around the Clean Water Package.

Copyright of NZ Law Limited, 2017

This article is not a substitute for legal advice and you should talk to a lawyer about your specific situation. Please contact Paul Owens at Parry Field Lawyers (348-8480) paulowens@parryfield.com

This morning I attended a “critical issues” update at the Canterbury Employers Chamber of Commerce today where the Christchurch Mayor spoke. Lianne Dalziel had a number of observations that she shared about where things were at with the Canterbury rebuild 6 years after the Christchurch earthquake and just a few days after the Port Hills Fires.

She identified the chance to “reimagine Christchurch” at this time. She referred to this video by the Christchurch airport which can be accessed here: https://www.youtube.com/watch?v=LqoTxbIANQ0 and noted that the themes there were that this was a region to “grow, connect, find balance”. She wanted to build on that so Christchurch became known as a “City of Opportunity”.

She talked about the need to ensure the city was connected with the wider region while the Canterbury region had better access to the city. She mentioned the word “resilience” and how this was an important theme for Christchurch and would be emphasised going forward. This had been shown once again by the Port Hills fires.

She concluded by noting that Christchurch was founded in 1856 by royal charter but as one of the oldest cities it had the chance to actually become one of the newest cities in New Zealand through the rebuild. She welcomed the Singularity University that had taken place a few months ago as a challenge for the future. How would innovation impact the future of the city as technology improved things – particularly with the growth of AI. It will definitely be interesting to see how the Canterbury rebuild can integrate some of those new approaches which will be coming in the future and will impact society and how we live in a city – from the perspective of transport, housing, environment, retail and businesses.

You have a great idea. On your own you cannot make it happen. When you bring in employees to help make the idea work one of the ways to incentivise them (particularly in the lean years at the start) can be to offer them some shareholding stake. This post will point out three key topics that we think you should think through in advance.

What if things turn to custard?: Things are rosy at the start of a new venture and it can be tempting to think that everything will work out. A few months or years later it may not be the same situation and someone who was brought in for a specific task as an employee may want out. Or you may want them out. If they exit as an employee then should they remain a shareholder?
How can you deal with this?: It is best to think this through objectively at the start and provide for a clear mechanism in a shareholders’ agreement. That way there will not be confusion and disagreements later on. We would typically see that a shareholders’ agreement provide for one of the following scenarios:

Good leaver: Depending on how long they have been involved with the venture, it may be appropriate for the employee to simply end their employment and retain their shareholding. Situations may just have changed (health issues, partner with job somewhere else etc) but there is often no desire for them to also be forced to give up their shareholding when they stop being an employee.

Underachieving employee: It is possible to build in a description of what individual shareholders who are to be employees will be expected to do in the business. That way there are some criteria which can be used to determine if they are underachieving. If they are, then there can be a mechanism to require them to sell their shares back to the Company or to the other Shareholders. This means they will not be involved in the business either as employee or shareholder going forward.

Bad leaver: This is a situation worse than an underachieving employee and can occur where a person has become disillusioned with their situation. In this scenario it may be appropriate to build in the ability to repurchase the shares of the bad leaver but also build in a discount for the share price that is paid.
Why is all this so important?: The culture of your new start-up will be critical for it being a success. One of the most common issues for a start-up can be how you deal with a situation where there is a disgruntled employee. Without a clear mechanism in place it can be extremely difficult to come to an agreement on the way forward and whether they stay or go, remain as a shareholder or not. That is why thinking this through in advance is so critical. As the saying goes, “hope for the best, prepare for the worst.”

We hope this guidance is of use and will trigger some thoughts for you about this important issue.

Business owners in Christchurch largely failed to take advantage of their business interruption cover. Here are some tips from our experience with those who did well.

Things to do:

Take photos of everything, before the clean-up if possible.
Get a copy of your business interruption policy schedule and the full wording document (if you don’t have them your insurance broker may do. If in doubt call the insurance company who will provide the full policy wording.)
Understand the cover that your particular BI policy provides. Your broker or your lawyer will help if they have had previous BI insurance experience (if not then get an advisor with experience). Most BI policies will pay for all claims preparation costs including legal and accounting advice. Good advice will make a very sizeable difference to your claim.
Business interruption cover usually only lasts 6-12 months starting from the date of the damage. Plan to make ALL the business adjustments you can within that period. That way the insurer will pay.
Possible policy responses may include re-establishing the business elsewhere, or changing the focus of the business.
Many BI policies cover staff wages and increased costs of business.
You can often obtain an interim payment from the insurer if you can clearly show a loss covered by the policy. A decent payment at this time allows more options and better decision making.

Don’t:

Decide to muddle through and think about it later. If you do that, your cover will expire and you may get nothing.
Make large changes to your business at your own cost without understanding what your BI cover provides for. BI cover is frequently more than expected.
Make decisions based on advice from someone who has not read your full policy wording.

Every situation is unique so please discuss your situation with a professional advisor who can provide tailored solutions to you. Please contact Paul Cowey at Parry Field Lawyers, paulcowey@parryfield.com (03 348 8480)

In an increasingly online world we are sharing and disclosing more and more online and that information is being held digitally. There are frequent examples in the news of leaks and data breaches. This article looks at this issue in detail and examines what the legal requirements are in this area. Understanding what to do when there are data breaches is vital in these times when it is an increasingly common event.

So you’ve had a Data Breach. What are you legally required to do?

On 1 December 2020, the new Privacy Act came into force. One of the significant changes is the requirement to report serious breaches to the Privacy Commissioner and the affected individuals.

What is a privacy breach?

A privacy breach is defined as:

unauthorised or accidental access to, or disclosure, alteration, loss or destruction of, the personal information; or
an action that prevents the agency from accessing the information on either a temporary or permanent basis.

When do I have to report a privacy breach?

A privacy breach becomes notifiable when it is reasonable to believe that the breach has caused serious harm to those affected, or is likely to do so.

How do I assess whether a privacy breach will cause serious harm?

When assessing the seriousness of a privacy breach, you will need to consider the following:

any action you have taken to reduce the risk of harm following the breach;
• whether the personal information is sensitive in nature (e.g. financial/health information);
• the nature of the harm that may be caused to affected individuals;
• who obtained or may obtain personal information as a result of the breach (if known);
• whether the personal information is protected by a security measure (e.g. was the information encrypted?); and
• any other relevant matters.

How do I report the privacy breach?

As soon as practicable after becoming aware of the privacy breach, you must notify the Privacy Commissioner. You can do so at the Privacy Commissioner’s ‘NotifyUs’ page here.

You must also notify the affected individuals as soon as practicable after becoming aware, unless an exception applies.

What are the Exceptions?

You do not need to disclose the breach if disclosure would prejudice the security or defence of New Zealand, prejudice maintenance of the law, endanger the safety of a person or reveal a trade secret.

You may delay notification if you believe disclosure would risk the security of the personal information and those risks outweigh the benefits of informing the affected individuals. As soon as the grounds for delay no longer pose a risk, you must inform the affected individuals of the breach.

Even if you rely on an exception, you must always notify the Privacy Commissioners of the breach as soon as practicable.

What happens if I don’t comply?

Failure to notify the Privacy Commissioner of a notifiable privacy breach may result in a fine of up to $10,000 or the issue of a public compliance notice.

How can I prepare?

You should use this opportunity to make sure your privacy policy will comply with the Act. You should also consider the following:

Make sure you have internal procedures in place to deal with how you become aware of a privacy breach;
Assess the personal information you hold, the reason you collect it, where it is stored and who has access to it;
Make sure your staff are aware of the new requirements.

This article is not a substitute for legal advice and you should contact your lawyer about your specific situation. If you think your privacy policy is insufficient (or non-existent!), we would strongly encourage you to get in touch with us. Contact Steven Moe at stevenMoe@parryfield.com

New Zealand has a similar takeovers regime to that in other Commonwealth jurisdictions like Australia and England. There are specific rules which govern when a takeover offer will need to be made and the process around doing so. This article sets out the key thresholds involved and points to be aware of if an acquisition in New Zealand is being considered.

Where are the rules set out?

Takeovers are governed by the Takeovers Code which became law 15 years ago. The purpose is to make sure that the acquirer of shares in a company complies with certain rules when certain thresholds are met. This means that shareholders are informed where there is a potential change of control of the company they own shares in.

Which companies do the rules apply to?

The rules only apply to certain “Code Companies” which are only New Zealand registered companies that:

have (or recently have had) listed shares that trade on the NZX; or
have 50 or more shareholders who hold voting rights as well as 50 or more share parcels.

What are the key thresholds?

The fundamental threshold is 20% because acquisitions of shares which will take a shareholding above 20% are caught by the Takeovers Code. In measuring this the percentage held by associates is also examined. Such acquisitions must be done in compliance with the rules.

A takeover offer can either be a partial or full takeover offer. Full takeover offers mean the offeror has to receive a minimum level of acceptance of the offer. So if the offeror does not reach more than 50% then the entire takeover fails.

This is in contrast to a partial takeover offer where the offeror makes an offer for only some of the shares. Whether it is successful will depend on the level that is sought – if for more than 50% then the acceptances need to be above that level. If for less than 50% then shareholders vote for or against the offer – so the offer needs to get to the percentage specified and also be approved by a majority of the shareholders. As this indicates, these rules are more complex than a full takeover.

The following are also important percentages to be aware of:

50% shareholding: As mentioned above, this is important in the context of a takeover to determine what rules apply;
5% creep: is permitted each year over a 12 month period for Shareholders who already own more than 50%; and
90% threshold: compulsory acquisition of shares is permitted above this level because they have become a dominant owner.

Conclusion

This short summary of some of the key points regarding takeovers in New Zealand is brief and the specific circumstances of any situation will need to be examined. If you have a target in mind then it would pay to discuss the context of that particular proposal with your advisers to obtain input on the best approach to adopt as one size will not fit every situation.

This article is not a substitute for legal advice and you should talk to a lawyer about your specific situation. Should you need any assistance, please contact Kris Morrison at Parry Field Lawyers (348-8480) krismorrison@parryfield.com

We are lawyers who have just opened our new law office in Selwyn district, in Rolleston. Why would lawyers come to Rolleston? There are several reasons why we have made this choice:

1. Filling a gap: right now most people need to drive in to Christchurch to see a lawyer. We want to be more proactive and accessible to Rolleston residents by coming out to Rolleston. Already the enthusiasm for this has surprised us and we are glad to offer a solution for people locally.
2. A close connection for us: Several of our staff have close connections out in the Rolleston community with Steven Moe moving back from overseas and choosing to take his young family there (his children go to Rolleston School). Paul Owens lives a short hop down the road in Prebbleton with his young family and other staff members live in Hornby and other locations in the area. Having operated in Christchurch since 1948 we are glad to expand our horizons to Rolleston as well to meet the needs of the community.
3. Growth and positive developments: Rolleston is growing in importance both in the Selwyn district and as a significant town located close to Christchurch. With a bustling shopping centre, iZone business park, increasing number of subdivisions and ever growing primary schools (and don’t forget Rolleston College) it is certainly not the sleepy town you may remember of years ago.
4. Community: Just attending the recent 150^th anniversary celebrations and seeing all the participants driving by in the parade, or going to the recent Fireworks at Foster Park where there were thousands of people enjoying the sinking ship slide, bouncy castles, merry go round etc you could see an energy and life and a real community spirit. The earthquakes and displacement following them certainly gave Rolleston an unexpected boost to its numbers but with that new growth there seems to be a real sense of community since nearly everyone is “new” to the area so there are fewer preconceptions and “the way it is always been done” attitudes.
5. The future: Anyone who spends time in Rolleston will easily tell that this is a town with a future and there will be a new generation coming through which call it their home. We are glad to arrive and be part of the history of this town as it moves into the next stage of life and are excited about the opportunities for the residents of Selwyn whether they are in Rolleston, Lincoln, Darfield, Leeston, Prebbleton or beyond.

Our offices are at 80 Rolleston Drive. W To send us an enquiry write to Paul Owens (Partner) at paulowens@parryfield.com or Steven Moe (Senior Associate) at stevenmoe@parryfield.com or phone us on 03 348 8480.

Kris Morrison and Steven Moe recently attended a “Turning Innovation into Gold” event hosted at the Canterbury Employers Chamber of Commerce. There were a range of interesting speakers and topics covered. The top 3 insights we heard were:

What businesses want and need: Six points were given by Louise Webster of the Innovation Council who said the companies they work with have identified six areas that they were focussed on:

understand and verify market opportunities;
have a go to market strategy;
working on the business vs working in the business (especially start-ups);
getting the right skills and talent;
channels to market and partnerships; and
funding to remain competitive nationally and internationally.

2. Mistakes made: One of the best parts was the five panellists talking about some mistakes they had made and learned from. Key points were:

Choose the right people to join the team who fit the culture and will work together well;
Do a lot of due diligence around risk factors and markets you will sell into;
Work closely with new partners / distributors – it is better to have a few people you really connect with to sell your product than having a long list of people who don’t really get behind and promote it;
Having lots of cash can be a bad thing – innovation often thrives from the “need to make do” attitude that results from not yet having funds flowing into the enterprise.

3. A change of mind set and culture: One of the key themes was the need for New Zealand to develop an innovative risk taking culture where people try things and fail, learn from that, and try again. To promote the creation of higher paying jobs and an economy that has moved beyond primary production is something we should be targeting. How do we do that? Well, that is a topic for another day…

The debate
We are lawyers. Like many professions and other businesses we are watching a significant debate. It’s like watching a tennis match sometimes. In our particular legal world we are being warned about a coming tsunami of so called “New Law”. In your business it will have some other title but it is the same thing essentially – the effect of new technology. Artificial intelligence (doing legal opinions faster and better than any human), virtual offices (who needs expensive downtown real estate anyway?), internet based client relationships, and so on.

Over on the other side of the metaphorical tennis court, but looking more like a novice playing against Roger Federer, is the school still arguing that all these things are not the significant disruption that some are saying they will be. Although usually acknowledging some of the significant developments that are occurring, this school warns against reacting too quickly or inappropriately and losing focus on your core business. It tends to denounce the other new offerings as being inferior and claims that over time consumers will come back when that quality gap is more apparent. We sympathise with this view because it is partly true and also because it’s comfortable. Change can be time consuming, costly and difficult and who really likes to change if things are going along smoothly enough? So the “don’t rock the boat” approach has a strong appeal.

The problem
However there is a problem with this view that seems to put down the impact of New Law. Consumer preferences shift more quickly now than ever before. And even if you just focus harder on the things that you do really well you may be at risk from those who do it cheaper and disrupt your market by offering an alternative. “Successful firms that are disrupted are not complacent or poorly managed. Instead, they continue on the path that brought them to success.” (Joshua Gans, The Disruption Dilemma, 2016.)

The challenge
So the challenge is this. How do we stop being just spectators, watching the tennis ball go back and forth, and, instead, stay in the game during all this apparent change that is coming?

What’s to stop my competitors or completely new players with their fancy digital marketing or online service taking my business share?

In case you think these are still just smug comments from the side lines, we too are facing the same questions. Law firms and accountancy firms for example are right in the spotlight of that next serve from technology.

We provide advice (judgement/wisdom), we process documents and file them (transactional administration) and we also provide information (data). Google also provides information. And lots of it. And so do many other providers. Our clients can now get answers from the internet to many of the questions they may have previously asked us. They can now download documents that, once, they could only get from us.

Those firms that provide mainly transactional functions or services e.g. form filling and basic accounting are already watching some of this work go elsewhere or being done smarter. The new accounting software known as Xero is a good example of a significant disruptor.

Solutions
Each industry and business sector will have its own nuanced response. Here are some potential solutions that we are finding either helpful for ourselves or are noticing are working for others particularly amongst some of our more nimble clients.

Don’t be afraid of exploring the use of digital marketing e.g. improving your website etc. We have found the key is to get connected with a good advisor. Ask around – in our experience skills vary considerably. Find a firm or person who ‘gets you’ i.e. understands you and your business ethos. Look at what other work they have done. Look at ways that you could improve your website both for desktop and mobile devices increasing new client traffic to you. If you are a small business this need not be a daunting task but the days are gone when this can be considered a luxury. It is now an essential investment for many.
Understand what is happening in your industry in regard to the changes that technology is bringing. Fear itself can become the problem (to misquote Franklin Roosevelt). This is particularly the case when you spend some time reading about the technological changes and what other smaller companies are doing about it. Information is power, or at least it’s a good light switch.
Think through a good strategy. This is sometimes made a lot easier if you have a business mentor or, if you are a little larger, a professional director or consultant on board who is experienced in strategic planning and change management. For smaller businesses mentoring services may be available in your area – Employer’s Associations, Councils and Chambers of Commerce may provide these services.
Don’t forget your existing clients. They are your clients for good reason and you also need to focus on what many consider to be the number one fundamental piece of advice. Provide your clients with excellent service and no reason to go elsewhere. This is easier said than done, but small things can make a great difference, such as:
1. Having great speed of communication and response times to your client – even if you can’t do the work straight away, at least let them know where they stand;
2. Focus on creating a great staff working environment. This can be a slow process but the investment is well worth it. Happy staff want to make clients happy; and
3. Don’t do it alone. Join an organisation that is most relevant to your industry and is one where there is good sharing of ideas and advice available. Chambers of Commerce, Employers’ Associations, and Specific Industry Groups etc. are all potential sources of help and information.

Conclusion
You don’t know what you don’t know. We are aware of how daunting all this can be as we are facing the same issues you probably are. In a rapidly changing business environment the best advice we can give is to get the best advice. In our experience those businesses small or large that are prepared to have an open mind and actively seek out good information (rather than just repeat past business practices) are the ones that tend to survive and grow. Those that rely merely on tradition will get overtaken. The difference these days is that the speed at which it happens is quite frightening.

We can help you
At Parry Field Lawyers we have had considerable experience with new businesses and well established ones. We are involved with Start-ups and long held family businesses. Although our involvement has often been with legal issues such as structuring, leases, succession and everything else you would associate with lawyers, much of our involvement has also been well beyond that. We can provide the benefit of our experience in dealing with hundreds of businesses over the years. We accept that costs can be a deterrent to opening up such a discussion and we are always happy to come and have an obligation free discussion with you at your business site so that you can gain some comfort and certainty around what we can provide. In many respects this journey into the new technological age is a shared one and our own experiences can also be of benefit to you. Let’s stay in the game together.

Clean Water Package Controversy

Where to from here for farmers?

Local authority compliance

Things to do:

Don’t:

Where are the rules set out?

Which companies do the rules apply to?

What are the key thresholds?

Conclusion

Christchurch CBD

Christchurch

Rolleston

Hokitika